Correlation Between OLB and Amdocs

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

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

Diversification Opportunities for OLB and Amdocs

0.23

Correlation Coefficient

OLB  Amdocs

Modest diversification

The 3 months correlation between OLB and Amdocs is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding OLB Group and Amdocs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amdocs and OLB 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 OLB Group are associated (or correlated) with Amdocs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amdocs has no effect on the direction of OLB i.e., OLB and Amdocs go up and down completely randomly.

Pair Corralation between OLB and Amdocs

Considering the 90-day investment horizon OLB Group is expected to generate 3.97 times more return on investment than Amdocs. However, OLB is 3.97 times more volatile than Amdocs. It trades about 0.02 of its potential returns per unit of risk. Amdocs is currently generating about 0.04 per unit of risk. If you would invest  138.00  in OLB Group on February 3, 2025 and sell it today you would lose (5.00) from holding OLB Group or give up 3.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

OLB Group  vs.  Amdocs

OLB Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OLB Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, OLB may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Amdocs

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Amdocs are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Amdocs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with OLB and Amdocs

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

The idea behind OLB Group and Amdocs 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.