Correlation Between Playtika Holding and Snam SpA

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

Diversification Opportunities for Playtika Holding and Snam SpA

-0.13

Correlation Coefficient

Playtika Holding  Snam SpA

Good diversification

The 3 months correlation between Playtika and Snam is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Snam SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snam SpA 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 Snam SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam SpA has no effect on the direction of Playtika Holding i.e., Playtika Holding and Snam SpA go up and down completely randomly.

Pair Corralation between Playtika Holding and Snam SpA

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Snam SpA. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.04 times less risky than Snam SpA. The stock trades about -0.09 of its potential returns per unit of risk. The Snam SpA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  479.00  in Snam SpA on October 26, 2024 and sell it today you would lose (21.00) from holding Snam SpA or give up 4.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

Playtika Holding Corp  vs.  Snam SpA

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.

Snam SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Snam SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Snam SpA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Playtika Holding and Snam SpA

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

The idea behind Playtika Holding Corp and Snam SpA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.