Correlation Between Playtika Holding and Flex
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Playtika Holding Corp and Flex, you can compare the effects of market volatilities on Playtika Holding and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Flex.
Diversification Opportunities for Playtika Holding and Flex
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Playtika and Flex is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Corp are associated (or correlated) with Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Playtika Holding i.e., Playtika Holding and Flex go up and down completely randomly.
Pair Corralation between Playtika Holding and Flex
Given the investment horizon of 90 days Playtika Holding is expected to generate 2.24 times less return on investment than Flex. But when comparing it to its historical volatility, Playtika Holding Corp is 1.03 times less risky than Flex. It trades about 0.05 of its potential returns per unit of risk. Flex is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,504 in Flex on August 29, 2024 and sell it today you would earn a total of 1,488 from holding Flex or generate 59.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. Flex
Performance |
| Timeline |
| Playtika Holding Corp |
| Flex |
Playtika Holding and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and Flex
The main advantage of trading using opposite Playtika Holding and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Playtika Holding vs. Doubledown Interactive Co | Playtika Holding vs. SohuCom | Playtika Holding vs. Playstudios | Playtika Holding vs. GDEV Inc |
Check out your portfolio center.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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