Correlation Between Playtika Holding and 191216DE7

Can any of the company-specific risk be diversified away by investing in both Playtika Holding and 191216DE7 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 191216DE7 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 COCA COLA CO, you can compare the effects of market volatilities on Playtika Holding and 191216DE7 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 191216DE7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and 191216DE7.

Diversification Opportunities for Playtika Holding and 191216DE7

0.17

Correlation Coefficient

Playtika Holding  191216DE7

Average diversification

The 3 months correlation between Playtika and 191216DE7 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216DE7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Playtika Holding i.e., Playtika Holding and 191216DE7 go up and down completely randomly.

Pair Corralation between Playtika Holding and 191216DE7

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the 191216DE7. In addition to that, Playtika Holding is 5.64 times more volatile than COCA COLA CO. It trades about -0.02 of its total potential returns per unit of risk. COCA COLA CO is currently generating about 0.0 per unit of volatility. If you would invest  8,027  in COCA COLA CO on September 28, 2024 and sell it today you would lose (37.00) from holding COCA COLA CO or give up 0.46% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  COCA COLA CO

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 inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

COCA A CO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 191216DE7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Playtika Holding and 191216DE7

The main advantage of trading using opposite Playtika Holding and 191216DE7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, 191216DE7 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 191216DE7 will offset losses from the drop in 191216DE7's long position.

The idea behind Playtika Holding Corp and COCA COLA CO 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.