Correlation Between Amdocs and ANA Holdings

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

Diversification Opportunities for Amdocs and ANA Holdings

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Amdocs and ALNPF is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Amdocs and ANA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANA Holdings and Amdocs 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 Amdocs are associated (or correlated) with ANA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANA Holdings has no effect on the direction of Amdocs i.e., Amdocs and ANA Holdings go up and down completely randomly.

Pair Corralation between Amdocs and ANA Holdings

Considering the 90-day investment horizon Amdocs is expected to generate 1.06 times more return on investment than ANA Holdings. However, Amdocs is 1.06 times more volatile than ANA Holdings. It trades about 0.08 of its potential returns per unit of risk. ANA Holdings is currently generating about -0.01 per unit of risk. If you would invest  6,943  in Amdocs on September 3, 2022 and sell it today you would earn a total of  2,056  from holding Amdocs or generate 29.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Amdocs  vs.  ANA Holdings

 Performance (%) 
       Timeline  
Amdocs 
Amdocs Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amdocs are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Amdocs may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Amdocs Price Channel

ANA Holdings 
ALNPF Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in ANA Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ANA Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2023.

ALNPF Price Channel

Amdocs and ANA Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amdocs and ANA Holdings

The main advantage of trading using opposite Amdocs and ANA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amdocs position performs unexpectedly, ANA Holdings 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 ANA Holdings will offset losses from the drop in ANA Holdings' long position.
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The idea behind Amdocs and ANA Holdings 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.
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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