Correlation Between United Fire and Playtika Holding

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

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

Diversification Opportunities for United Fire and Playtika Holding

-0.34

Correlation Coefficient

United Fire  Playtika Holding

Very good diversification

The 3 months correlation between United and Playtika is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group 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 United Fire 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 United Fire Group 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 United Fire i.e., United Fire and Playtika Holding go up and down completely randomly.

Pair Corralation between United Fire and Playtika Holding

Given the investment horizon of 90 days United Fire Group is expected to generate 0.66 times more return on investment than Playtika Holding. However, United Fire Group is 1.51 times less risky than Playtika Holding. It trades about 0.04 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.21 per unit of risk. If you would invest  2,851  in United Fire Group on December 21, 2024 and sell it today you would earn a total of  95.00  from holding United Fire Group or generate 3.33% return on investment over 90 days.

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

United Fire Group  vs.  Playtika Holding Corp

United Fire Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Fire Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, United Fire is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 United Fire and Playtika Holding

The main advantage of trading using opposite United Fire and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire 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 United Fire Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.