Correlation Between Playtika Holding and Telecom

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

Diversification Opportunities for Playtika Holding and Telecom

0.34

Correlation Coefficient

Playtika Holding  Telecom

Weak diversification

The 3 months correlation between Playtika and Telecom is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Telecom Italia Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Italia Capital 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 Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Italia Capital has no effect on the direction of Playtika Holding i.e., Playtika Holding and Telecom go up and down completely randomly.

Pair Corralation between Playtika Holding and Telecom

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 0.66 times more return on investment than Telecom. However, Playtika Holding Corp is 1.51 times less risky than Telecom. It trades about 0.21 of its potential returns per unit of risk. Telecom Italia Capital is currently generating about -0.22 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	Very Weak
Accuracy	90.0%
Values	Daily Returns

Playtika Holding Corp  vs.  Telecom Italia Capital

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.

Telecom Italia Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Playtika Holding and Telecom

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

The idea behind Playtika Holding Corp and Telecom Italia Capital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.