Correlation Between ARISTOCRAT LEISURE and PLAYTIKA HOLDING

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

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

Diversification Opportunities for ARISTOCRAT LEISURE and PLAYTIKA HOLDING

0.27

Correlation Coefficient

ARISTOCRAT LEISURE  PLAYTIKA HOLDING

Modest diversification

The 3 months correlation between ARISTOCRAT and PLAYTIKA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and PLAYTIKA HOLDING go up and down completely randomly.

Pair Corralation between ARISTOCRAT LEISURE and PLAYTIKA HOLDING

Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 0.49 times more return on investment than PLAYTIKA HOLDING. However, ARISTOCRAT LEISURE is 2.04 times less risky than PLAYTIKA HOLDING. It trades about 0.07 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  3,594  in ARISTOCRAT LEISURE on April 23, 2025 and sell it today you would earn a total of  186.00  from holding ARISTOCRAT LEISURE or generate 5.18% return on investment over 90 days.

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

ARISTOCRAT LEISURE  vs.  PLAYTIKA HOLDING DL 01

ARISTOCRAT LEISURE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ARISTOCRAT LEISURE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ARISTOCRAT LEISURE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ARISTOCRAT LEISURE and PLAYTIKA HOLDING

The main advantage of trading using opposite ARISTOCRAT LEISURE and PLAYTIKA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.