Correlation Between Beachbody and Playtika Holding

Can any of the company-specific risk be diversified away by investing in both Beachbody 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 Beachbody and Playtika Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Beachbody and Playtika Holding Corp, you can compare the effects of market volatilities on Beachbody 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 Beachbody with a short position of Playtika Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beachbody and Playtika Holding.

Diversification Opportunities for Beachbody and Playtika Holding

-0.18

Correlation Coefficient

Beachbody  Playtika Holding

Good diversification

The 3 months correlation between Beachbody and Playtika is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Beachbody 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 Beachbody 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 Beachbody 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 Beachbody i.e., Beachbody and Playtika Holding go up and down completely randomly.

Pair Corralation between Beachbody and Playtika Holding

Given the investment horizon of 90 days Beachbody is expected to generate 2.9 times more return on investment than Playtika Holding. However, Beachbody is 2.9 times more volatile than Playtika Holding Corp. It trades about 0.04 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.09 per unit of risk. If you would invest  612.00  in Beachbody on September 14, 2024 and sell it today you would earn a total of  41.00  from holding Beachbody or generate 6.7% return on investment over 90 days.

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

Beachbody  vs.  Playtika Holding Corp

Beachbody

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Beachbody are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Beachbody may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Playtika Holding Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Playtika Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Beachbody and Playtika Holding

The main advantage of trading using opposite Beachbody and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beachbody 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.

The idea behind Beachbody and Playtika Holding Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..