Correlation Between Playtika Holding and Trio Tech

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

Diversification Opportunities for Playtika Holding and Trio Tech

0.73

Correlation Coefficient

Playtika Holding  Trio Tech

Poor diversification

The 3 months correlation between Playtika and Trio is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of Playtika Holding i.e., Playtika Holding and Trio Tech go up and down completely randomly.

Pair Corralation between Playtika Holding and Trio Tech

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.86 times more return on investment than Trio Tech. However, Playtika Holding Corp is 1.17 times less risky than Trio Tech. It trades about 0.21 of its potential returns per unit of risk. Trio Tech International is currently generating about -0.07 per unit of risk. If you would invest  672.00  in Playtika Holding Corp on October 26, 2024 and sell it today you would earn a total of  42.00  from holding Playtika Holding Corp or generate 6.25% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Trio Tech International

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.

Trio Tech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trio Tech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Trio Tech is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Playtika Holding and Trio Tech

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

The idea behind Playtika Holding Corp and Trio Tech International 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.