Correlation Between Vodka Brands and Playtika Holding

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

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

Diversification Opportunities for Vodka Brands and Playtika Holding

0.43

Correlation Coefficient

Vodka Brands  Playtika Holding

Very weak diversification

The 3 months correlation between Vodka and Playtika is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Vodka Brands Corp 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 Vodka Brands 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 Vodka Brands Corp 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 Vodka Brands i.e., Vodka Brands and Playtika Holding go up and down completely randomly.

Pair Corralation between Vodka Brands and Playtika Holding

Given the investment horizon of 90 days Vodka Brands Corp is expected to generate 0.48 times more return on investment than Playtika Holding. However, Vodka Brands Corp is 2.08 times less risky than Playtika Holding. It trades about -0.21 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.23 per unit of risk. If you would invest  112.00  in Vodka Brands Corp on September 16, 2024 and sell it today you would lose (5.00) from holding Vodka Brands Corp or give up 4.46% of portfolio value over 90 days.

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

Vodka Brands Corp  vs.  Playtika Holding Corp

Vodka Brands Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Vodka Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Playtika Holding Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Vodka Brands and Playtika Holding

The main advantage of trading using opposite Vodka Brands and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodka Brands 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 Vodka Brands Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.