Correlation Between Playtika Holding and Q2 Holdings

Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings, you can compare the effects of market volatilities on Playtika Holding and Q2 Holdings 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 Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Q2 Holdings.

Diversification Opportunities for Playtika Holding and Q2 Holdings

0.92

Correlation Coefficient

Playtika Holding  Q2 Holdings

Almost no diversification

The 3 months correlation between Playtika and QTWO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 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 Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of Playtika Holding i.e., Playtika Holding and Q2 Holdings go up and down completely randomly.

Pair Corralation between Playtika Holding and Q2 Holdings

Given the investment horizon of 90 days Playtika Holding is expected to generate 3.17 times less return on investment than Q2 Holdings. But when comparing it to its historical volatility, Playtika Holding Corp is 1.62 times less risky than Q2 Holdings. It trades about 0.14 of its potential returns per unit of risk. Q2 Holdings is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  7,205  in Q2 Holdings on September 12, 2024 and sell it today you would earn a total of  3,494  from holding Q2 Holdings or generate 48.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Playtika Holding Corp  vs.  Q2 Holdings

Playtika Holding Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Playtika Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Q2 Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Q2 Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Q2 Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playtika Holding and Q2 Holdings

The main advantage of trading using opposite Playtika Holding and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.

The idea behind Playtika Holding Corp and Q2 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.