Correlation Between PlayAGS and Lear

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

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

Diversification Opportunities for PlayAGS and Lear

0.38

Correlation Coefficient

PlayAGS  Lear

Weak diversification

The 3 months correlation between PlayAGS and Lear is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding PlayAGS and Lear Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lear and PlayAGS 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 PlayAGS are associated (or correlated) with Lear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lear has no effect on the direction of PlayAGS i.e., PlayAGS and Lear go up and down completely randomly.

Pair Corralation between PlayAGS and Lear

Considering the 90-day investment horizon PlayAGS is expected to generate 0.19 times more return on investment than Lear. However, PlayAGS is 5.39 times less risky than Lear. It trades about 0.29 of its potential returns per unit of risk. Lear Corporation is currently generating about 0.04 per unit of risk. If you would invest  1,147  in PlayAGS on December 27, 2024 and sell it today you would earn a total of  66.00  from holding PlayAGS or generate 5.75% return on investment over 90 days.

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

PlayAGS  vs.  Lear Corp.

PlayAGS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PlayAGS are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, PlayAGS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Lear

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lear Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Lear is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PlayAGS and Lear

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

The idea behind PlayAGS and Lear Corporation 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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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.