Correlation Between PlayAGS and Adient PLC
Can any of the company-specific risk be diversified away by investing in both PlayAGS and Adient 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 PlayAGS and Adient PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayAGS and Adient PLC, you can compare the effects of market volatilities on PlayAGS and Adient 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 PlayAGS with a short position of Adient PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayAGS and Adient PLC.
Diversification Opportunities for PlayAGS and Adient PLC
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PlayAGS and Adient is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Adient PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adient PLC and PlayAGS 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 PlayAGS are associated (or correlated) with Adient PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adient PLC has no effect on the direction of PlayAGS i.e., PlayAGS and Adient PLC go up and down completely randomly.
Pair Corralation between PlayAGS and Adient PLC
Considering the 90-day investment horizon PlayAGS is expected to generate 1.32 times more return on investment than Adient PLC. However, PlayAGS is 1.32 times more volatile than Adient PLC. It trades about 0.07 of its potential returns per unit of risk. Adient PLC is currently generating about -0.04 per unit of risk. If you would invest 524.00 in PlayAGS on August 26, 2024 and sell it today you would earn a total of 642.00 from holding PlayAGS or generate 122.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PlayAGS vs. Adient PLC
Performance |
| Timeline |
| PlayAGS |
| Adient PLC |
PlayAGS and Adient PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PlayAGS and Adient PLC
The main advantage of trading using opposite PlayAGS and Adient PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayAGS position performs unexpectedly, Adient 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 Adient PLC will offset losses from the drop in Adient PLC's long position.| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
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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 the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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