Correlation Between Playtika Holding and La Rosa

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

Diversification Opportunities for Playtika Holding and La Rosa

0.23

Correlation Coefficient

Playtika Holding  La Rosa

Modest diversification

The 3 months correlation between Playtika and LRHC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and La Rosa Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Rosa Holdings 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 La Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Rosa Holdings has no effect on the direction of Playtika Holding i.e., Playtika Holding and La Rosa go up and down completely randomly.

Pair Corralation between Playtika Holding and La Rosa

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.27 times more return on investment than La Rosa. However, Playtika Holding Corp is 3.64 times less risky than La Rosa. It trades about -0.23 of its potential returns per unit of risk. La Rosa Holdings is currently generating about -0.12 per unit of risk. If you would invest  862.00  in Playtika Holding Corp on October 25, 2024 and sell it today you would lose (147.00) from holding Playtika Holding Corp or give up 17.05% 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.  La Rosa Holdings

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.

La Rosa Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days La Rosa Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Playtika Holding and La Rosa

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

The idea behind Playtika Holding Corp and La Rosa Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.