Correlation Between Playtika Holding and Chemours

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

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

Diversification Opportunities for Playtika Holding and Chemours

0.62

Correlation Coefficient

Playtika Holding  Chemours

Poor diversification

The 3 months correlation between Playtika and Chemours is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Corp are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Playtika Holding i.e., Playtika Holding and Chemours go up and down completely randomly.

Pair Corralation between Playtika Holding and Chemours

Given the investment horizon of 90 days Playtika Holding is expected to generate 1.4 times less return on investment than Chemours. But when comparing it to its historical volatility, Playtika Holding Corp is 2.34 times less risky than Chemours. It trades about 0.09 of its potential returns per unit of risk. Chemours Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,781  in Chemours Co on September 14, 2024 and sell it today you would earn a total of  159.00  from holding Chemours Co or generate 8.93% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Chemours Co

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.

Chemours

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Playtika Holding and Chemours

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

The idea behind Playtika Holding Corp and Chemours Co 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.