Correlation Between Playtika Holding and Pekin Life

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

Diversification Opportunities for Playtika Holding and Pekin Life

0.33

Correlation Coefficient

Playtika Holding  Pekin Life

Weak diversification

The 3 months correlation between Playtika and Pekin is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Pekin Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pekin Life Insurance 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 Pekin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pekin Life Insurance has no effect on the direction of Playtika Holding i.e., Playtika Holding and Pekin Life go up and down completely randomly.

Pair Corralation between Playtika Holding and Pekin Life

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Pekin Life. In addition to that, Playtika Holding is 6.87 times more volatile than Pekin Life Insurance. It trades about -0.1 of its total potential returns per unit of risk. Pekin Life Insurance is currently generating about 0.14 per unit of volatility. If you would invest  1,150  in Pekin Life Insurance on September 21, 2024 and sell it today you would earn a total of  26.00  from holding Pekin Life Insurance or generate 2.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Playtika Holding Corp  vs.  Pekin Life Insurance

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 uncertain 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.

Pekin Life Insurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pekin Life Insurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Pekin Life is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Playtika Holding and Pekin Life

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

The idea behind Playtika Holding Corp and Pekin Life Insurance 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.