Correlation Between FREEPORT and Playtika Holding

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

By analyzing existing cross correlation between FREEPORT MCMORAN INC 4625 and Playtika Holding Corp, you can compare the effects of market volatilities on FREEPORT 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 FREEPORT with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREEPORT and Playtika Holding.

Diversification Opportunities for FREEPORT and Playtika Holding

0.24

Correlation Coefficient

FREEPORT  Playtika Holding

Modest diversification

The 3 months correlation between FREEPORT and Playtika is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding FREEPORT MCMORAN INC 4625 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 FREEPORT 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 FREEPORT MCMORAN INC 4625 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 FREEPORT i.e., FREEPORT and Playtika Holding go up and down completely randomly.

Pair Corralation between FREEPORT and Playtika Holding

Assuming the 90 days trading horizon FREEPORT MCMORAN INC 4625 is expected to generate 0.61 times more return on investment than Playtika Holding. However, FREEPORT MCMORAN INC 4625 is 1.63 times less risky than Playtika Holding. It trades about -0.2 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.57 per unit of risk. If you would invest  9,795  in FREEPORT MCMORAN INC 4625 on September 25, 2024 and sell it today you would lose (528.00) from holding FREEPORT MCMORAN INC 4625 or give up 5.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

FREEPORT MCMORAN INC 4625  vs.  Playtika Holding Corp

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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 FREEPORT MCMORAN INC 4625 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 FREEPORT and Playtika Holding

The main advantage of trading using opposite FREEPORT and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREEPORT 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 FREEPORT MCMORAN INC 4625 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.