Correlation Between Playtika Holding and VirnetX Holding

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

Diversification Opportunities for Playtika Holding and VirnetX Holding

-0.05

Correlation Coefficient

Playtika Holding  VirnetX Holding

Good diversification

The 3 months correlation between Playtika and VirnetX is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and VirnetX Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VirnetX Holding Corp 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 VirnetX Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VirnetX Holding Corp has no effect on the direction of Playtika Holding i.e., Playtika Holding and VirnetX Holding go up and down completely randomly.

Pair Corralation between Playtika Holding and VirnetX Holding

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the VirnetX Holding. In addition to that, Playtika Holding is 1.08 times more volatile than VirnetX Holding Corp. It trades about -0.09 of its total potential returns per unit of risk. VirnetX Holding Corp is currently generating about -0.04 per unit of volatility. If you would invest  878.00  in VirnetX Holding Corp on December 29, 2024 and sell it today you would lose (120.00) from holding VirnetX Holding Corp or give up 13.67% of portfolio value over 90 days.

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

Playtika Holding Corp  vs.  VirnetX Holding Corp

Playtika Holding Corp

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

VirnetX Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days VirnetX Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Playtika Holding and VirnetX Holding

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

The idea behind Playtika Holding Corp and VirnetX Holding 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.