Correlation Between Ametek and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Ametek and Las Vegas 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 Ametek and Las Vegas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ametek Inc and Las Vegas Sands, you can compare the effects of market volatilities on Ametek and Las Vegas 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 Ametek with a short position of Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and Las Vegas.
Diversification Opportunities for Ametek and Las Vegas
Average diversification
The 3 months correlation between Ametek and Las is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands and Ametek 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 Ametek Inc are associated (or correlated) with Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Ametek i.e., Ametek and Las Vegas go up and down completely randomly.
Pair Corralation between Ametek and Las Vegas
Assuming the 90 days trading horizon Ametek Inc is expected to generate 0.75 times more return on investment than Las Vegas. However, Ametek Inc is 1.34 times less risky than Las Vegas. It trades about 0.05 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.02 per unit of risk. If you would invest 13,827 in Ametek Inc on September 23, 2024 and sell it today you would earn a total of 4,560 from holding Ametek Inc or generate 32.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.38% |
| Values | Daily Returns |
Ametek Inc vs. Las Vegas Sands
Performance |
| Timeline |
| Ametek Inc |
| Las Vegas Sands |
Ametek and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ametek and Las Vegas
The main advantage of trading using opposite Ametek and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| Ametek vs. Samsung Electronics Co | Ametek vs. Samsung Electronics Co | Ametek vs. Hyundai Motor | Ametek vs. Reliance Industries Ltd |
| Las Vegas vs. Uniper SE | Las Vegas vs. Mulberry Group PLC | Las Vegas vs. London Security Plc | Las Vegas vs. Triad Group PLC |
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 the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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