Correlation Between Playtika Holding and CITIGROUP

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

Diversification Opportunities for Playtika Holding and CITIGROUP

-0.37

Correlation Coefficient

Playtika Holding  CITIGROUP

Very good diversification

The 3 months correlation between Playtika and CITIGROUP is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and CITIGROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC has no effect on the direction of Playtika Holding i.e., Playtika Holding and CITIGROUP go up and down completely randomly.

Pair Corralation between Playtika Holding and CITIGROUP

Given the investment horizon of 90 days Playtika Holding Corp is expected to generate 4.54 times more return on investment than CITIGROUP. However, Playtika Holding is 4.54 times more volatile than CITIGROUP INC. It trades about 0.14 of its potential returns per unit of risk. CITIGROUP INC is currently generating about -0.15 per unit of risk. 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	98.41%
Values	Daily Returns

Playtika Holding Corp  vs.  CITIGROUP INC

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.

CITIGROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CITIGROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITIGROUP is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Playtika Holding and CITIGROUP

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

The idea behind Playtika Holding Corp and CITIGROUP INC 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..