Correlation Between PLAYTIKA HOLDING and PPHE HOTEL

Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and PPHE HOTEL 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 PPHE HOTEL 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 PPHE HOTEL GROUP, you can compare the effects of market volatilities on PLAYTIKA HOLDING and PPHE HOTEL 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 PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and PPHE HOTEL.

Diversification Opportunities for PLAYTIKA HOLDING and PPHE HOTEL

0.03

Correlation Coefficient

PLAYTIKA HOLDING  PPHE HOTEL

Significant diversification

The 3 months correlation between PLAYTIKA and PPHE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and PPHE HOTEL go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and PPHE HOTEL

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the PPHE HOTEL. In addition to that, PLAYTIKA HOLDING is 1.23 times more volatile than PPHE HOTEL GROUP. It trades about -0.41 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.34 per unit of volatility. If you would invest  1,410  in PPHE HOTEL GROUP on September 23, 2024 and sell it today you would earn a total of  200.00  from holding PPHE HOTEL GROUP or generate 14.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PLAYTIKA HOLDING DL 01  vs.  PPHE HOTEL GROUP

PLAYTIKA HOLDING

Risk-Adjusted Performance

0 of 100

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

PPHE HOTEL GROUP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PPHE HOTEL GROUP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PPHE HOTEL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PLAYTIKA HOLDING and PPHE HOTEL

The main advantage of trading using opposite PLAYTIKA HOLDING and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.

The idea behind PLAYTIKA HOLDING DL 01 and PPHE HOTEL GROUP 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.