Correlation Between Zedge and Playtika Holding

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

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

Diversification Opportunities for Zedge and Playtika Holding

-0.67

Correlation Coefficient

Zedge  Playtika Holding

Excellent diversification

The 3 months correlation between Zedge and Playtika is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc 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 Zedge 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 Zedge Inc 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 Zedge i.e., Zedge and Playtika Holding go up and down completely randomly.

Pair Corralation between Zedge and Playtika Holding

Given the investment horizon of 90 days Zedge Inc is expected to under-perform the Playtika Holding. In addition to that, Zedge is 2.38 times more volatile than Playtika Holding Corp. It trades about -0.08 of its total potential returns per unit of risk. Playtika Holding Corp is currently generating about 0.18 per unit of volatility. If you would invest  723.00  in Playtika Holding Corp on September 4, 2024 and sell it today you would earn a total of  123.00  from holding Playtika Holding Corp or generate 17.01% return on investment over 90 days.

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

Zedge Inc  vs.  Playtika Holding Corp

Zedge Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zedge Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Playtika Holding Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Playtika Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Zedge and Playtika Holding

The main advantage of trading using opposite Zedge and Playtika Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge 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 Zedge Inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.