Correlation Between Playtika Holding and Siriuspoint

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

Diversification Opportunities for Playtika Holding and Siriuspoint

0.35

Correlation Coefficient

Playtika Holding  Siriuspoint

Weak diversification

The 3 months correlation between Playtika and Siriuspoint is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Playtika Holding i.e., Playtika Holding and Siriuspoint go up and down completely randomly.

Pair Corralation between Playtika Holding and Siriuspoint

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Siriuspoint. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.67 times less risky than Siriuspoint. The stock trades about -0.4 of its potential returns per unit of risk. The Siriuspoint is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,577  in Siriuspoint on October 8, 2024 and sell it today you would lose (63.00) from holding Siriuspoint or give up 3.99% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  Siriuspoint

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.

Siriuspoint

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playtika Holding and Siriuspoint

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

The idea behind Playtika Holding Corp and Siriuspoint 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.