Correlation Between Playtika Holding and Transocean

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

Diversification Opportunities for Playtika Holding and Transocean

0.04

Correlation Coefficient

Playtika Holding  Transocean

Significant diversification

The 3 months correlation between Playtika and Transocean is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Transocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transocean 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 Transocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transocean has no effect on the direction of Playtika Holding i.e., Playtika Holding and Transocean go up and down completely randomly.

Pair Corralation between Playtika Holding and Transocean

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.58 times more return on investment than Transocean. However, Playtika Holding Corp is 1.73 times less risky than Transocean. It trades about 0.01 of its potential returns per unit of risk. Transocean is currently generating about -0.06 per unit of risk. If you would invest  759.00  in Playtika Holding Corp on September 16, 2024 and sell it today you would earn a total of  4.00  from holding Playtika Holding Corp or generate 0.53% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Transocean

Playtika Holding Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Transocean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transocean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Playtika Holding and Transocean

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

The idea behind Playtika Holding Corp and Transocean 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.