Correlation Between BAXALTA and Playstudios

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

By analyzing existing cross correlation between BAXALTA INC 4 and Playstudios, you can compare the effects of market volatilities on BAXALTA and Playstudios 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 BAXALTA with a short position of Playstudios. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAXALTA and Playstudios.

Diversification Opportunities for BAXALTA and Playstudios

-0.31

Correlation Coefficient

BAXALTA  Playstudios

Very good diversification

The 3 months correlation between BAXALTA and Playstudios is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BAXALTA INC 4 and Playstudios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playstudios and BAXALTA 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 BAXALTA INC 4 are associated (or correlated) with Playstudios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playstudios has no effect on the direction of BAXALTA i.e., BAXALTA and Playstudios go up and down completely randomly.

Pair Corralation between BAXALTA and Playstudios

Assuming the 90 days trading horizon BAXALTA INC 4 is expected to generate 0.04 times more return on investment than Playstudios. However, BAXALTA INC 4 is 26.9 times less risky than Playstudios. It trades about -0.12 of its potential returns per unit of risk. Playstudios is currently generating about -0.12 per unit of risk. If you would invest  9,955  in BAXALTA INC 4 on December 30, 2024 and sell it today you would lose (109.00) from holding BAXALTA INC 4 or give up 1.09% of portfolio value over 90 days.

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

BAXALTA INC 4  vs.  Playstudios

BAXALTA INC 4

Risk-Adjusted Performance

Very Weak

Over the last 90 days BAXALTA INC 4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAXALTA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Playstudios

Risk-Adjusted Performance

Very Weak

Over the last 90 days Playstudios has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BAXALTA and Playstudios

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

The idea behind BAXALTA INC 4 and Playstudios 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.