Correlation Between Playtika Holding and Neogen

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

Diversification Opportunities for Playtika Holding and Neogen

0.2

Correlation Coefficient

Playtika Holding  Neogen

Modest diversification

The 3 months correlation between Playtika and Neogen is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Playtika Holding i.e., Playtika Holding and Neogen go up and down completely randomly.

Pair Corralation between Playtika Holding and Neogen

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.7 times more return on investment than Neogen. However, Playtika Holding Corp is 1.42 times less risky than Neogen. It trades about -0.53 of its potential returns per unit of risk. Neogen is currently generating about -0.38 per unit of risk. If you would invest  862.00  in Playtika Holding Corp on September 24, 2024 and sell it today you would lose (177.00) from holding Playtika Holding Corp or give up 20.53% 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.  Neogen

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.

Neogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Playtika Holding and Neogen

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

The idea behind Playtika Holding Corp and Neogen 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.