Correlation Between Iwatani and PLAYTIKA HOLDING

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

By analyzing existing cross correlation between Iwatani and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Iwatani 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 Iwatani with a short position of PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iwatani and PLAYTIKA HOLDING.

Diversification Opportunities for Iwatani and PLAYTIKA HOLDING

-0.68

Correlation Coefficient

Iwatani  PLAYTIKA HOLDING

Excellent diversification

The 3 months correlation between Iwatani and PLAYTIKA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Iwatani and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING and Iwatani 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 Iwatani 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 has no effect on the direction of Iwatani i.e., Iwatani and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between Iwatani and PLAYTIKA HOLDING

Assuming the 90 days trading horizon Iwatani is expected to under-perform the PLAYTIKA HOLDING. But the stock apears to be less risky and, when comparing its historical volatility, Iwatani is 1.52 times less risky than PLAYTIKA HOLDING. The stock trades about -0.19 of its potential returns per unit of risk. The PLAYTIKA HOLDING DL 01 is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  680.00  in PLAYTIKA HOLDING DL 01 on September 22, 2024 and sell it today you would lose (15.00) from holding PLAYTIKA HOLDING DL 01 or give up 2.21% of portfolio value over 90 days.

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

Iwatani  vs.  PLAYTIKA HOLDING DL 01

Iwatani

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iwatani has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

PLAYTIKA HOLDING

Risk-Adjusted Performance

0 of 100

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

Pair Trading with Iwatani and PLAYTIKA HOLDING

The main advantage of trading using opposite Iwatani and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iwatani 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 Iwatani and PLAYTIKA HOLDING DL 01 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.