Correlation Between Capitalworks Emerging and Playtika Holding

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

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

Diversification Opportunities for Capitalworks Emerging and Playtika Holding

0.25

Correlation Coefficient

Capitalworks Emerging  Playtika Holding

Modest diversification

The 3 months correlation between Capitalworks and Playtika is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Capitalworks Emerging Markets 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 Capitalworks Emerging 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 Capitalworks Emerging Markets 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 Capitalworks Emerging i.e., Capitalworks Emerging and Playtika Holding go up and down completely randomly.

Pair Corralation between Capitalworks Emerging and Playtika Holding

If you would invest  1,057  in Capitalworks Emerging Markets on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Capitalworks Emerging Markets or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Capitalworks Emerging Markets  vs.  Playtika Holding Corp

Capitalworks Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capitalworks Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capitalworks Emerging is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Playtika Holding Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Playtika Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Capitalworks Emerging and Playtika Holding

The main advantage of trading using opposite Capitalworks Emerging and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitalworks Emerging 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 Capitalworks Emerging Markets 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.