Correlation Between Mohawk Industries and PlayAGS
Can any of the company-specific risk be diversified away by investing in both Mohawk Industries and PlayAGS 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 Mohawk Industries and PlayAGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mohawk Industries and PlayAGS, you can compare the effects of market volatilities on Mohawk Industries and PlayAGS 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 Mohawk Industries with a short position of PlayAGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mohawk Industries and PlayAGS.
Diversification Opportunities for Mohawk Industries and PlayAGS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mohawk and PlayAGS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mohawk Industries and PlayAGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlayAGS and Mohawk Industries 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 Mohawk Industries are associated (or correlated) with PlayAGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlayAGS has no effect on the direction of Mohawk Industries i.e., Mohawk Industries and PlayAGS go up and down completely randomly.
Pair Corralation between Mohawk Industries and PlayAGS
Considering the 90-day investment horizon Mohawk Industries is expected to generate 2.05 times less return on investment than PlayAGS. But when comparing it to its historical volatility, Mohawk Industries is 1.26 times less risky than PlayAGS. It trades about 0.04 of its potential returns per unit of risk. PlayAGS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 511.00 in PlayAGS on August 27, 2024 and sell it today you would earn a total of 655.00 from holding PlayAGS or generate 128.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mohawk Industries vs. PlayAGS
Performance |
| Timeline |
| Mohawk Industries |
| PlayAGS |
Mohawk Industries and PlayAGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mohawk Industries and PlayAGS
The main advantage of trading using opposite Mohawk Industries and PlayAGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mohawk Industries position performs unexpectedly, PlayAGS 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 PlayAGS will offset losses from the drop in PlayAGS's long position.| Mohawk Industries vs. Willis Lease Finance | Mohawk Industries vs. Rocky Brands | Mohawk Industries vs. First Business Financial |
| PlayAGS vs. Light Wonder | PlayAGS vs. Everi Holdings | PlayAGS vs. Inspired Entertainment | PlayAGS vs. International Game Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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