Correlation Between Playtika Holding and NCR Voyix

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

Diversification Opportunities for Playtika Holding and NCR Voyix

0.66

Correlation Coefficient

Playtika Holding  NCR Voyix

Poor diversification

The 3 months correlation between Playtika and NCR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and NCR Voyix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Voyix 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 NCR Voyix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Voyix has no effect on the direction of Playtika Holding i.e., Playtika Holding and NCR Voyix go up and down completely randomly.

Pair Corralation between Playtika Holding and NCR Voyix

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the NCR Voyix. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.09 times less risky than NCR Voyix. The stock trades about -0.03 of its potential returns per unit of risk. The NCR Voyix is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,378  in NCR Voyix on September 18, 2024 and sell it today you would earn a total of  121.00  from holding NCR Voyix or generate 8.78% 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.  NCR Voyix

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 quite persistent basic indicators, Playtika Holding is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

NCR Voyix

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NCR Voyix are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, NCR Voyix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Playtika Holding and NCR Voyix

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

The idea behind Playtika Holding Corp and NCR Voyix 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.