Correlation Between Draftkings and Allscripts Hlthcare

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Can any of the company-specific risk be diversified away by investing in both Draftkings and Allscripts Hlthcare 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 Draftkings and Allscripts Hlthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Draftkings and Allscripts Hlthcare, you can compare the effects of market volatilities on Draftkings and Allscripts Hlthcare 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 Draftkings with a short position of Allscripts Hlthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Draftkings and Allscripts Hlthcare.

Diversification Opportunities for Draftkings and Allscripts Hlthcare

  Correlation Coefficient

Very poor diversification

The 3 months correlation between Draftkings and Allscripts is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Draftkings and Allscripts Hlthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allscripts Hlthcare and Draftkings 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 Draftkings are associated (or correlated) with Allscripts Hlthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allscripts Hlthcare has no effect on the direction of Draftkings i.e., Draftkings and Allscripts Hlthcare go up and down completely randomly.

Pair Corralation between Draftkings and Allscripts Hlthcare

Given the investment horizon of 90 days Draftkings is expected to generate 2.41 times more return on investment than Allscripts Hlthcare. However, Draftkings is 2.41 times more volatile than Allscripts Hlthcare. It trades about -0.03 of its potential returns per unit of risk. Allscripts Hlthcare is currently generating about -0.29 per unit of risk. If you would invest  1,650  in Draftkings on June 30, 2022 and sell it today you would lose (62.00)  from holding Draftkings or give up 3.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Draftkings  vs.  Allscripts Hlthcare

 Performance (%) 
Draftkings Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Draftkings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Draftkings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Draftkings Price Channel

Allscripts Hlthcare 
Allscripts Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Allscripts Hlthcare are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Allscripts Hlthcare may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Allscripts Price Channel

Draftkings and Allscripts Hlthcare Volatility Contrast

   Predicted Return Density   

Pair Trading with Draftkings and Allscripts Hlthcare

The main advantage of trading using opposite Draftkings and Allscripts Hlthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Draftkings position performs unexpectedly, Allscripts Hlthcare 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 Allscripts Hlthcare will offset losses from the drop in Allscripts Hlthcare's long position.
Draftkings vs. Amazon Inc
The idea behind Draftkings and Allscripts Hlthcare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Allscripts Hlthcare vs. Amazon Inc
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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