Correlation Between Playtika Holding and SOUTHERN

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

Diversification Opportunities for Playtika Holding and SOUTHERN

0.5

Correlation Coefficient

Playtika Holding  SOUTHERN

Very weak diversification

The 3 months correlation between Playtika and SOUTHERN is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Playtika Holding i.e., Playtika Holding and SOUTHERN go up and down completely randomly.

Pair Corralation between Playtika Holding and SOUTHERN

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the SOUTHERN. In addition to that, Playtika Holding is 5.49 times more volatile than SOUTHERN PER CORP. It trades about -0.02 of its total potential returns per unit of risk. SOUTHERN PER CORP is currently generating about -0.08 per unit of volatility. If you would invest  9,921  in SOUTHERN PER CORP on October 10, 2024 and sell it today you would lose (152.00) from holding SOUTHERN PER CORP or give up 1.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.44%
Values	Daily Returns

Playtika Holding Corp  vs.  SOUTHERN PER CORP

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 recent stock price mess, may contribute to short-term losses for the institutional investors.

SOUTHERN PER P

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Playtika Holding and SOUTHERN

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

The idea behind Playtika Holding Corp and SOUTHERN PER CORP 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.