Correlation Between Playtika Holding and Abcellera Biologics

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

Diversification Opportunities for Playtika Holding and Abcellera Biologics

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Playtika and Abcellera is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics 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 Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Playtika Holding i.e., Playtika Holding and Abcellera Biologics go up and down completely randomly.

Pair Corralation between Playtika Holding and Abcellera Biologics

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Abcellera Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.38 times less risky than Abcellera Biologics. The stock trades about -0.06 of its potential returns per unit of risk. The Abcellera Biologics is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  5,890  in Abcellera Biologics on August 30, 2022 and sell it today you would lose (4,538)  from holding Abcellera Biologics or give up 77.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.55%
ValuesDaily Returns

Playtika Holding Corp  vs.  Abcellera Biologics

 Performance (%) 
       Timeline  
Playtika Holding Corp 
Playtika Performance
0 of 100
Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Playtika Price Channel

Abcellera Biologics 
Abcellera Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Abcellera Biologics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Abcellera Biologics revealed solid returns over the last few months and may actually be approaching a breakup point.

Abcellera Price Channel

Playtika Holding and Abcellera Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Playtika Holding and Abcellera Biologics

The main advantage of trading using opposite Playtika Holding and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Playtika Holding position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.
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The idea behind Playtika Holding Corp and Abcellera Biologics 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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