Correlation Between Skillz Platform and Playtika Holding

Can any of the company-specific risk be diversified away by investing in both Skillz Platform and Playtika 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 Skillz Platform and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Skillz Platform and Playtika Holding Corp, you can compare the effects of market volatilities on Skillz Platform and Playtika 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 Skillz Platform with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skillz Platform and Playtika Holding.

Diversification Opportunities for Skillz Platform and Playtika Holding

0.71

Correlation Coefficient

Skillz Platform  Playtika Holding

Poor diversification

The 3 months correlation between Skillz and Playtika is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Skillz Platform and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp and Skillz Platform 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 Skillz Platform are associated (or correlated) with Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of Skillz Platform i.e., Skillz Platform and Playtika Holding go up and down completely randomly.

Pair Corralation between Skillz Platform and Playtika Holding

Given the investment horizon of 90 days Skillz Platform is expected to generate 1.06 times more return on investment than Playtika Holding. However, Skillz Platform is 1.06 times more volatile than Playtika Holding Corp. It trades about -0.01 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.09 per unit of risk. If you would invest  496.00  in Skillz Platform on December 29, 2024 and sell it today you would lose (46.00) from holding Skillz Platform or give up 9.27% of portfolio value over 90 days.

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

Skillz Platform  vs.  Playtika Holding Corp

Skillz Platform

Risk-Adjusted Performance

Very Weak

Over the last 90 days Skillz Platform has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Skillz Platform is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Skillz Platform and Playtika Holding

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

The idea behind Skillz Platform and Playtika 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.