Correlation Between AmTrust Financial and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and Playtech Plc 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 AmTrust Financial and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AmTrust Financial Services and Playtech plc, you can compare the effects of market volatilities on AmTrust Financial and Playtech Plc 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 AmTrust Financial with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and Playtech Plc.
Diversification Opportunities for AmTrust Financial and Playtech Plc
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AmTrust and Playtech is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and AmTrust Financial 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 AmTrust Financial Services are associated (or correlated) with Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech plc has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Playtech Plc go up and down completely randomly.
Pair Corralation between AmTrust Financial and Playtech Plc
If you would invest 1,435 in AmTrust Financial Services on September 2, 2024 and sell it today you would earn a total of 25.00 from holding AmTrust Financial Services or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AmTrust Financial Services vs. Playtech plc
Performance |
| Timeline |
| AmTrust Financial |
| Playtech plc |
AmTrust Financial and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AmTrust Financial and Playtech Plc
The main advantage of trading using opposite AmTrust Financial and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, Playtech Plc 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 Playtech Plc will offset losses from the drop in Playtech Plc's long position.| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
| Playtech Plc vs. Teleflex Incorporated | Playtech Plc vs. Viemed Healthcare | Playtech Plc vs. BioNTech SE | Playtech Plc vs. Aeye Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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