Correlation Between Playtika Holding and Bluebird Bio

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

Diversification Opportunities for Playtika Holding and Bluebird Bio

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Playtika and Bluebird is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Playtika Holding Corp and Bluebird Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluebird Bio 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 Bluebird Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluebird Bio has no effect on the direction of Playtika Holding i.e., Playtika Holding and Bluebird Bio go up and down completely randomly.

Pair Corralation between Playtika Holding and Bluebird Bio

Given the investment horizon of 90 days Playtika Holding Corp is expected to under-perform the Bluebird Bio. But the stock apears to be less risky and, when comparing its historical volatility, Playtika Holding Corp is 1.58 times less risky than Bluebird Bio. The stock trades about -0.05 of its potential returns per unit of risk. The Bluebird Bio is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,884  in Bluebird Bio on September 4, 2022 and sell it today you would lose (2,035)  from holding Bluebird Bio or give up 70.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.38%
ValuesDaily Returns

Playtika Holding Corp  vs.  Bluebird Bio

 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 fairly strong basic indicators, Playtika Holding is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Playtika Price Channel

Bluebird Bio 
Bluebird Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bluebird Bio are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Bluebird Bio exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bluebird Price Channel

Playtika Holding and Bluebird Bio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Playtika Holding and Bluebird Bio

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

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