Correlation Between Kaufman Broad and PLAYTIKA HOLDING

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

By analyzing existing cross correlation between Kaufman Broad SA and PLAYTIKA HOLDING DL 01, you can compare the effects of market volatilities on Kaufman Broad 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 Kaufman Broad with a short position of PLAYTIKA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Broad and PLAYTIKA HOLDING.

Diversification Opportunities for Kaufman Broad and PLAYTIKA HOLDING

-0.34

Correlation Coefficient

Kaufman Broad  PLAYTIKA HOLDING

Very good diversification

The 3 months correlation between Kaufman and PLAYTIKA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Broad SA and PLAYTIKA HOLDING DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYTIKA HOLDING and Kaufman Broad 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 Kaufman Broad SA 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 has no effect on the direction of Kaufman Broad i.e., Kaufman Broad and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between Kaufman Broad and PLAYTIKA HOLDING

Assuming the 90 days horizon Kaufman Broad SA is expected to generate 0.67 times more return on investment than PLAYTIKA HOLDING. However, Kaufman Broad SA is 1.48 times less risky than PLAYTIKA HOLDING. It trades about 0.01 of its potential returns per unit of risk. PLAYTIKA HOLDING DL 01 is currently generating about -0.04 per unit of risk. If you would invest  3,086  in Kaufman Broad SA on April 20, 2025 and sell it today you would earn a total of  14.00  from holding Kaufman Broad SA or generate 0.45% return on investment over 90 days.

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

Kaufman Broad SA  vs.  PLAYTIKA HOLDING DL 01

Kaufman Broad SA

Risk-Adjusted Performance

Very Weak

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

PLAYTIKA HOLDING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PLAYTIKA HOLDING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kaufman Broad and PLAYTIKA HOLDING

The main advantage of trading using opposite Kaufman Broad and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Broad 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 Kaufman Broad SA and PLAYTIKA HOLDING DL 01 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.