Correlation Between Amphenol and Gaming
Can any of the company-specific risk be diversified away by investing in both Amphenol and Gaming 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 Amphenol and Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amphenol and Gaming and Leisure, you can compare the effects of market volatilities on Amphenol and Gaming 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 Amphenol with a short position of Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amphenol and Gaming.
Diversification Opportunities for Amphenol and Gaming
Very weak diversification
The 3 months correlation between Amphenol and Gaming is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure and Amphenol 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 Amphenol are associated (or correlated) with Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Amphenol i.e., Amphenol and Gaming go up and down completely randomly.
Pair Corralation between Amphenol and Gaming
Assuming the 90 days horizon Amphenol is expected to generate 1.8 times more return on investment than Gaming. However, Amphenol is 1.8 times more volatile than Gaming and Leisure. It trades about 0.12 of its potential returns per unit of risk. Gaming and Leisure is currently generating about 0.08 per unit of risk. If you would invest 5,068 in Amphenol on November 3, 2024 and sell it today you would earn a total of 1,851 from holding Amphenol or generate 36.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amphenol vs. Gaming and Leisure
Performance |
| Timeline |
| Amphenol |
| Gaming and Leisure |
Amphenol and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amphenol and Gaming
The main advantage of trading using opposite Amphenol and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphenol position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Amphenol vs. PennantPark Investment | Amphenol vs. ECHO INVESTMENT ZY | Amphenol vs. American Airlines Group | Amphenol vs. China Eastern Airlines |
| Gaming vs. Crown Castle International | Gaming vs. Equinix | Gaming vs. W P Carey | Gaming vs. Lamar Advertising |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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