Correlation Between PLAYTIKA HOLDING and Chalice Mining

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Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and Chalice Mining 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 PLAYTIKA HOLDING and Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTIKA HOLDING DL 01 and Chalice Mining Limited, you can compare the effects of market volatilities on PLAYTIKA HOLDING and Chalice Mining 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 PLAYTIKA HOLDING with a short position of Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and Chalice Mining.

Diversification Opportunities for PLAYTIKA HOLDING and Chalice Mining

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between PLAYTIKA and Chalice is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01 are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and Chalice Mining go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and Chalice Mining

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to generate 0.66 times more return on investment than Chalice Mining. However, PLAYTIKA HOLDING DL 01 is 1.51 times less risky than Chalice Mining. It trades about -0.04 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about -0.36 per unit of risk. If you would invest  685.00  in PLAYTIKA HOLDING DL 01 on September 24, 2024 and sell it today you would lose (40.00) from holding PLAYTIKA HOLDING DL 01 or give up 5.84% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PLAYTIKA HOLDING DL 01  vs.  Chalice Mining Limited

 Performance 
       Timeline  
PLAYTIKA HOLDING 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PLAYTIKA HOLDING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Chalice Mining 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Chalice Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

PLAYTIKA HOLDING and Chalice Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PLAYTIKA HOLDING and Chalice Mining

The main advantage of trading using opposite PLAYTIKA HOLDING and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, Chalice Mining 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.
The idea behind PLAYTIKA HOLDING DL 01 and Chalice Mining Limited 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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