Correlation Between Playtika Holding and Zoom Video

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

Diversification Opportunities for Playtika Holding and Zoom Video

0.75

Correlation Coefficient

Playtika Holding  Zoom Video

Poor diversification

The 3 months correlation between Playtika and Zoom is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Playtika Holding i.e., Playtika Holding and Zoom Video go up and down completely randomly.

Pair Corralation between Playtika Holding and Zoom Video

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Zoom Video. In addition to that, Playtika Holding is 1.23 times more volatile than Zoom Video Communications. It trades about -0.01 of its total potential returns per unit of risk. Zoom Video Communications is currently generating about 0.04 per unit of volatility. If you would invest  6,568  in Zoom Video Communications on September 19, 2024 and sell it today you would earn a total of  1,892  from holding Zoom Video Communications or generate 28.81% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Zoom Video Communications

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 uncertain 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.

Zoom Video Communications

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Zoom Video displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Playtika Holding and Zoom Video

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

The idea behind Playtika Holding Corp and Zoom Video Communications 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.