Correlation Between Playtika Holding and RADIATE

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

Diversification Opportunities for Playtika Holding and RADIATE

0.1

Correlation Coefficient

Playtika Holding  RADIATE

Average diversification

The 3 months correlation between Playtika and RADIATE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and RADIATE HOLDCO LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RADIATE HOLDCO LLC 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 RADIATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RADIATE HOLDCO LLC has no effect on the direction of Playtika Holding i.e., Playtika Holding and RADIATE go up and down completely randomly.

Pair Corralation between Playtika Holding and RADIATE

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.36 times more return on investment than RADIATE. However, Playtika Holding Corp is 2.8 times less risky than RADIATE. It trades about -0.02 of its potential returns per unit of risk. RADIATE HOLDCO LLC is currently generating about -0.17 per unit of risk. If you would invest  773.00  in Playtika Holding Corp on September 17, 2024 and sell it today you would lose (25.00) from holding Playtika Holding Corp or give up 3.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.77%
Values	Daily Returns

Playtika Holding Corp  vs.  RADIATE HOLDCO LLC

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 quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

RADIATE HOLDCO LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RADIATE HOLDCO LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for RADIATE HOLDCO LLC investors.

Pair Trading with Playtika Holding and RADIATE

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

The idea behind Playtika Holding Corp and RADIATE HOLDCO LLC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..