Correlation Between Playtika Holding and Kaltura

Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Kaltura 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 Kaltura 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 Kaltura, you can compare the effects of market volatilities on Playtika Holding and Kaltura 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 Kaltura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Kaltura.

Diversification Opportunities for Playtika Holding and Kaltura

-0.09

Correlation Coefficient

Playtika Holding  Kaltura

Good diversification

The 3 months correlation between Playtika and Kaltura is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Kaltura in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaltura 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 Kaltura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaltura has no effect on the direction of Playtika Holding i.e., Playtika Holding and Kaltura go up and down completely randomly.

Pair Corralation between Playtika Holding and Kaltura

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Kaltura. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 3.14 times less risky than Kaltura. The stock trades about -0.05 of its potential returns per unit of risk. The Kaltura is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  134.00  in Kaltura on October 20, 2024 and sell it today you would earn a total of  94.00  from holding Kaltura or generate 70.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Playtika Holding Corp  vs.  Kaltura

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 quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Kaltura

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaltura are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Kaltura reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playtika Holding and Kaltura

The main advantage of trading using opposite Playtika Holding and Kaltura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Kaltura 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 Kaltura will offset losses from the drop in Kaltura's long position.

The idea behind Playtika Holding Corp and Kaltura 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.