Correlation Between TKO Group and Playtika Holding

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

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

Diversification Opportunities for TKO Group and Playtika Holding

0.35

Correlation Coefficient

TKO Group  Playtika Holding

Weak diversification

The 3 months correlation between TKO and Playtika is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding TKO Group Holdings, 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 TKO Group 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 TKO Group Holdings, 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 TKO Group i.e., TKO Group and Playtika Holding go up and down completely randomly.

Pair Corralation between TKO Group and Playtika Holding

Considering the 90-day investment horizon TKO Group Holdings, is expected to generate 0.5 times more return on investment than Playtika Holding. However, TKO Group Holdings, is 2.01 times less risky than Playtika Holding. It trades about 0.07 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.07 per unit of risk. If you would invest  14,363  in TKO Group Holdings, on December 27, 2024 and sell it today you would earn a total of  1,098  from holding TKO Group Holdings, or generate 7.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

TKO Group Holdings,  vs.  Playtika Holding Corp

TKO Group Holdings,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TKO Group Holdings, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, TKO Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 TKO Group and Playtika Holding

The main advantage of trading using opposite TKO Group and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKO Group 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 TKO Group Holdings, 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.

Check out your portfolio center.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.