Correlation Between 191216DE7 and Playtika Holding

Can any of the company-specific risk be diversified away by investing in both 191216DE7 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 191216DE7 and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COCA COLA CO and Playtika Holding Corp, you can compare the effects of market volatilities on 191216DE7 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 191216DE7 with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of 191216DE7 and Playtika Holding.

Diversification Opportunities for 191216DE7 and Playtika Holding

0.12

Correlation Coefficient

191216DE7  Playtika Holding

Average diversification

The 3 months correlation between 191216DE7 and Playtika is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding COCA COLA CO 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 191216DE7 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 COCA COLA CO 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 191216DE7 i.e., 191216DE7 and Playtika Holding go up and down completely randomly.

Pair Corralation between 191216DE7 and Playtika Holding

Assuming the 90 days trading horizon COCA COLA CO is expected to generate 0.29 times more return on investment than Playtika Holding. However, COCA COLA CO is 3.48 times less risky than Playtika Holding. It trades about -0.27 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.51 per unit of risk. If you would invest  8,271  in COCA COLA CO on September 27, 2024 and sell it today you would lose (281.00) from holding COCA COLA CO or give up 3.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

COCA COLA CO  vs.  Playtika Holding Corp

COCA A CO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COCA COLA CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for COCA COLA CO investors.

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 inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with 191216DE7 and Playtika Holding

The main advantage of trading using opposite 191216DE7 and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 191216DE7 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 COCA COLA CO 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.