Correlation Between WuXi AppTec and Playtika Holding
Can any of the company-specific risk be diversified away by investing in both WuXi AppTec 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 WuXi AppTec and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WuXi AppTec Co and Playtika Holding Corp, you can compare the effects of market volatilities on WuXi AppTec 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 WuXi AppTec with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of WuXi AppTec and Playtika Holding.
Diversification Opportunities for WuXi AppTec and Playtika Holding
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WuXi and Playtika is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding WuXi AppTec Co 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 WuXi AppTec 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 WuXi AppTec Co 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 WuXi AppTec i.e., WuXi AppTec and Playtika Holding go up and down completely randomly.
Pair Corralation between WuXi AppTec and Playtika Holding
Assuming the 90 days horizon WuXi AppTec Co is expected to under-perform the Playtika Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, WuXi AppTec Co is 1.46 times less risky than Playtika Holding. The pink sheet trades about -0.3 of its potential returns per unit of risk. The Playtika Holding Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 676.00 in Playtika Holding Corp on October 24, 2024 and sell it today you would earn a total of 24.00 from holding Playtika Holding Corp or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
WuXi AppTec Co vs. Playtika Holding Corp
Performance |
| Timeline |
| WuXi AppTec |
| Playtika Holding Corp |
WuXi AppTec and Playtika Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WuXi AppTec and Playtika Holding
The main advantage of trading using opposite WuXi AppTec and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WuXi AppTec 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.| WuXi AppTec vs. Loews Corp | WuXi AppTec vs. Wizz Air Holdings | WuXi AppTec vs. Sinclair Broadcast Group | WuXi AppTec vs. Cheche Group Class |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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