Correlation Between Playtika Holding and UL Solutions
Can any of the company-specific risk be diversified away by investing in both Playtika Holding and UL Solutions 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 UL Solutions 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 UL Solutions, you can compare the effects of market volatilities on Playtika Holding and UL Solutions 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 UL Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and UL Solutions.
Diversification Opportunities for Playtika Holding and UL Solutions
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Playtika and ULS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and UL Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UL Solutions 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 UL Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UL Solutions has no effect on the direction of Playtika Holding i.e., Playtika Holding and UL Solutions go up and down completely randomly.
Pair Corralation between Playtika Holding and UL Solutions
Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the UL Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.15 times less risky than UL Solutions. The stock trades about -0.05 of its potential returns per unit of risk. The UL Solutions is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,150 in UL Solutions on September 12, 2024 and sell it today you would earn a total of 28.00 from holding UL Solutions or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Playtika Holding Corp vs. UL Solutions
Performance |
| Timeline |
| Playtika Holding Corp |
| UL Solutions |
Playtika Holding and UL Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Playtika Holding and UL Solutions
The main advantage of trading using opposite Playtika Holding and UL Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, UL Solutions 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 UL Solutions will offset losses from the drop in UL Solutions' long position.| Playtika Holding vs. GDEV Inc | Playtika Holding vs. AEye Inc | Playtika Holding vs. Arqit Quantum Warrants | Playtika Holding vs. Xos Equity Warrants |
| UL Solutions vs. Skechers USA | UL Solutions vs. Western Acquisition Ventures | UL Solutions vs. CECO Environmental Corp | UL Solutions vs. Timken Company |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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