Correlation Between Playtika Holding and Tianjin Capital

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

Diversification Opportunities for Playtika Holding and Tianjin Capital

0.29

Correlation Coefficient

Playtika Holding  Tianjin Capital

Modest diversification

The 3 months correlation between Playtika and Tianjin is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Playtika Holding i.e., Playtika Holding and Tianjin Capital go up and down completely randomly.

Pair Corralation between Playtika Holding and Tianjin Capital

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Tianjin Capital. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 2.54 times less risky than Tianjin Capital. The stock trades about -0.02 of its potential returns per unit of risk. The Tianjin Capital Environmental is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9.93  in Tianjin Capital Environmental on October 5, 2024 and sell it today you would earn a total of  28.07  from holding Tianjin Capital Environmental or generate 282.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.78%
Values	Daily Returns

Playtika Holding Corp  vs.  Tianjin Capital Environmental

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.

Tianjin Capital Envi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Tianjin Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Playtika Holding and Tianjin Capital

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

The idea behind Playtika Holding Corp and Tianjin Capital Environmental 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.