Correlation Between Amadeus IT and CSL
Can any of the company-specific risk be diversified away by investing in both Amadeus IT and CSL 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 Amadeus IT and CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amadeus IT Group and CSL Limited, you can compare the effects of market volatilities on Amadeus IT and CSL 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 Amadeus IT with a short position of CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amadeus IT and CSL.
Diversification Opportunities for Amadeus IT and CSL
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amadeus and CSL is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Amadeus IT Group and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited and Amadeus IT 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 Amadeus IT Group are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Amadeus IT i.e., Amadeus IT and CSL go up and down completely randomly.
Pair Corralation between Amadeus IT and CSL
Assuming the 90 days horizon Amadeus IT Group is expected to generate 1.23 times more return on investment than CSL. However, Amadeus IT is 1.23 times more volatile than CSL Limited. It trades about 0.04 of its potential returns per unit of risk. CSL Limited is currently generating about 0.0 per unit of risk. If you would invest 5,217 in Amadeus IT Group on September 2, 2024 and sell it today you would earn a total of 1,938 from holding Amadeus IT Group or generate 37.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.52% |
| Values | Daily Returns |
Amadeus IT Group vs. CSL Limited
Performance |
| Timeline |
| Amadeus IT Group |
| CSL Limited |
Amadeus IT and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amadeus IT and CSL
The main advantage of trading using opposite Amadeus IT and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amadeus IT position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Amadeus IT vs. Amadeus IT Holding | Amadeus IT vs. Yatra Online | Amadeus IT vs. MakeMyTrip Limited | Amadeus IT vs. Tuniu Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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