Correlation Between Amdocs and TRAINLINE PLC

Can any of the company-specific risk be diversified away by investing in both Amdocs and TRAINLINE 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 Amdocs and TRAINLINE PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amdocs Limited and TRAINLINE PLC LS, you can compare the effects of market volatilities on Amdocs and TRAINLINE 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 Amdocs with a short position of TRAINLINE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amdocs and TRAINLINE PLC.

Diversification Opportunities for Amdocs and TRAINLINE PLC

0.67

Correlation Coefficient

Amdocs  TRAINLINE PLC

Poor diversification

The 3 months correlation between Amdocs and TRAINLINE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amdocs Limited and TRAINLINE PLC LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAINLINE PLC LS 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 Limited are associated (or correlated) with TRAINLINE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAINLINE PLC LS has no effect on the direction of Amdocs i.e., Amdocs and TRAINLINE PLC go up and down completely randomly.

Pair Corralation between Amdocs and TRAINLINE PLC

Assuming the 90 days horizon Amdocs Limited is expected to under-perform the TRAINLINE PLC. But the stock apears to be less risky and, when comparing its historical volatility, Amdocs Limited is 1.55 times less risky than TRAINLINE PLC. The stock trades about -0.06 of its potential returns per unit of risk. The TRAINLINE PLC LS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  320.00  in TRAINLINE PLC LS on May 21, 2025 and sell it today you would lose (14.00) from holding TRAINLINE PLC LS or give up 4.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Amdocs Limited  vs.  TRAINLINE PLC LS

Amdocs Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Amdocs Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Amdocs is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

TRAINLINE PLC LS

Risk-Adjusted Performance

Weakest

Over the last 90 days TRAINLINE PLC LS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TRAINLINE PLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amdocs and TRAINLINE PLC

The main advantage of trading using opposite Amdocs and TRAINLINE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amdocs position performs unexpectedly, TRAINLINE 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 TRAINLINE PLC will offset losses from the drop in TRAINLINE PLC's long position.

The idea behind Amdocs Limited and TRAINLINE PLC LS 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.