Correlation Between Amgen and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Amgen 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 Amgen and Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amgen Inc and Playtech plc, you can compare the effects of market volatilities on Amgen 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 Amgen with a short position of Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amgen and Playtech Plc.
Diversification Opportunities for Amgen and Playtech Plc
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amgen and Playtech is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amgen Inc and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc and Amgen 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 Amgen Inc 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 Amgen i.e., Amgen and Playtech Plc go up and down completely randomly.
Pair Corralation between Amgen and Playtech Plc
Assuming the 90 days horizon Amgen Inc is expected to under-perform the Playtech Plc. In addition to that, Amgen is 2.49 times more volatile than Playtech plc. It trades about -0.11 of its total potential returns per unit of risk. Playtech plc is currently generating about -0.08 per unit of volatility. If you would invest 885.00 in Playtech plc on August 29, 2024 and sell it today you would lose (28.00) from holding Playtech plc or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amgen Inc vs. Playtech plc
Performance |
| Timeline |
| Amgen Inc |
| Playtech plc |
Amgen and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amgen and Playtech Plc
The main advantage of trading using opposite Amgen and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amgen 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.| Amgen vs. TRADEDOUBLER AB SK | Amgen vs. AUTO TRADER ADR | Amgen vs. Auto Trader Group | Amgen vs. SIDETRADE EO 1 |
| Playtech Plc vs. COSTCO WHOLESALE CDR | Playtech Plc vs. Zijin Mining Group | Playtech Plc vs. JIAHUA STORES | Playtech Plc vs. PICKN PAY STORES |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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