Correlation Between Playtika Holding and Paltalk

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

Diversification Opportunities for Playtika Holding and Paltalk

-0.66

Correlation Coefficient

Playtika Holding  Paltalk

Excellent diversification

The 3 months correlation between Playtika and Paltalk is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Paltalk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paltalk 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 Paltalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paltalk has no effect on the direction of Playtika Holding i.e., Playtika Holding and Paltalk go up and down completely randomly.

Pair Corralation between Playtika Holding and Paltalk

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.32 times more return on investment than Paltalk. However, Playtika Holding Corp is 3.11 times less risky than Paltalk. It trades about -0.02 of its potential returns per unit of risk. Paltalk is currently generating about -0.03 per unit of risk. If you would invest  877.00  in Playtika Holding Corp on September 13, 2024 and sell it today you would lose (55.00) from holding Playtika Holding Corp or give up 6.27% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  Paltalk

Playtika Holding Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Playtika Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Paltalk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paltalk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Playtika Holding and Paltalk

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

The idea behind Playtika Holding Corp and Paltalk 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.