Correlation Between Playtika Holding and CardieX

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

Diversification Opportunities for Playtika Holding and CardieX

0.0

Correlation Coefficient

Playtika Holding  CardieX

Pay attention - limited upside

The 3 months correlation between Playtika and CardieX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and CardieX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CardieX Limited 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 CardieX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CardieX Limited has no effect on the direction of Playtika Holding i.e., Playtika Holding and CardieX go up and down completely randomly.

Pair Corralation between Playtika Holding and CardieX

If you would invest (100.00) in CardieX Limited on February 5, 2024 and sell it today you would earn a total of  100.00  from holding CardieX Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Playtika Holding Corp  vs.  CardieX Limited

Playtika Holding Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Playtika Holding Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Playtika Holding disclosed solid returns over the last few months and may actually be approaching a breakup point.

CardieX Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CardieX Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, CardieX is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Playtika Holding and CardieX

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

The idea behind Playtika Holding Corp and CardieX Limited 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.