Correlation Between Playtika Holding and Jacobs Solutions

Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Jacobs Solutions at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Playtika Holding and Jacobs Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Playtika Holding Corp and Jacobs Solutions, you can compare the effects of market volatilities on Playtika Holding and Jacobs Solutions and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Playtika Holding with a short position of Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Jacobs Solutions.

Diversification Opportunities for Playtika Holding and Jacobs Solutions

0.2

Correlation Coefficient

Playtika Holding  Jacobs Solutions

Modest diversification

The 3 months correlation between Playtika and Jacobs is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions and Playtika Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Playtika Holding Corp are associated (or correlated) with Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of Playtika Holding i.e., Playtika Holding and Jacobs Solutions go up and down completely randomly.

Pair Corralation between Playtika Holding and Jacobs Solutions

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Jacobs Solutions. In addition to that, Playtika Holding is 2.26 times more volatile than Jacobs Solutions. It trades about -0.48 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about -0.05 per unit of volatility. If you would invest  13,736  in Jacobs Solutions on September 23, 2024 and sell it today you would lose (161.00) from holding Jacobs Solutions or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Playtika Holding Corp  vs.  Jacobs Solutions

Playtika Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Jacobs Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jacobs Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking indicators, Jacobs Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Playtika Holding and Jacobs Solutions

The main advantage of trading using opposite Playtika Holding and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Jacobs Solutions can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.

The idea behind Playtika Holding Corp and Jacobs Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.