Correlation Between Noble Plc and Playtika Holding

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

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

Diversification Opportunities for Noble Plc and Playtika Holding

-0.1

Correlation Coefficient

Noble Plc  Playtika Holding

Good diversification

The 3 months correlation between Noble and Playtika is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc 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 Noble Plc 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 Noble plc 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 Noble Plc i.e., Noble Plc and Playtika Holding go up and down completely randomly.

Pair Corralation between Noble Plc and Playtika Holding

Allowing for the 90-day total investment horizon Noble plc is expected to under-perform the Playtika Holding. In addition to that, Noble Plc is 1.62 times more volatile than Playtika Holding Corp. It trades about -0.01 of its total potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.14 per unit of volatility. If you would invest  730.00  in Playtika Holding Corp on September 12, 2024 and sell it today you would earn a total of  97.00  from holding Playtika Holding Corp or generate 13.29% return on investment over 90 days.

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

Noble plc  vs.  Playtika Holding Corp

Noble plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Noble Plc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Playtika Holding Corp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Playtika Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Noble Plc and Playtika Holding

The main advantage of trading using opposite Noble Plc and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc 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 Noble plc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.