Correlation Between Playtika Holding and Western Asset

Can any of the company-specific risk be diversified away by investing in both Playtika Holding and Western Asset 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 Western Asset 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 Western Asset Investment, you can compare the effects of market volatilities on Playtika Holding and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Playtika Holding and Western Asset.

Diversification Opportunities for Playtika Holding and Western Asset

-0.16

Correlation Coefficient

Playtika Holding  Western Asset

Good diversification

The 3 months correlation between Playtika and Western is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of Playtika Holding i.e., Playtika Holding and Western Asset go up and down completely randomly.

Pair Corralation between Playtika Holding and Western Asset

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Western Asset. In addition to that, Playtika Holding is 3.02 times more volatile than Western Asset Investment. It trades about -0.02 of its total potential returns per unit of risk. Western Asset Investment is currently generating about 0.02 per unit of volatility. If you would invest  1,552  in Western Asset Investment on September 27, 2024 and sell it today you would earn a total of  75.03  from holding Western Asset Investment or generate 4.83% return on investment over 90 days.

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

Playtika Holding Corp  vs.  Western Asset Investment

Playtika Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Western Asset Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Playtika Holding and Western Asset

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

The idea behind Playtika Holding Corp and Western Asset Investment 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 Global Correlations module to find global opportunities by holding instruments from different markets.