Correlation Between Amdocs and Dolby Laboratories

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

By analyzing existing cross correlation between Amdocs and Dolby Laboratories, you can compare the effects of market volatilities on Amdocs and Dolby Laboratories 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 Dolby Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amdocs and Dolby Laboratories.

Diversification Opportunities for Amdocs and Dolby Laboratories

0.37

Correlation Coefficient

Amdocs  Dolby Laboratories

Weak diversification

The 3 months correlation between Amdocs and Dolby is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Amdocs and Dolby Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolby Laboratories 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 Dolby Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolby Laboratories has no effect on the direction of Amdocs i.e., Amdocs and Dolby Laboratories go up and down completely randomly.

Pair Corralation between Amdocs and Dolby Laboratories

Considering the 90-day investment horizon Amdocs is expected to under-perform the Dolby Laboratories. In addition to that, Amdocs is 1.97 times more volatile than Dolby Laboratories. It trades about -0.2 of its total potential returns per unit of risk. Dolby Laboratories is currently generating about 0.16 per unit of volatility. If you would invest  6,476  in Dolby Laboratories on September 8, 2025 and sell it today you would earn a total of  224.00  from holding Dolby Laboratories or generate 3.46% return on investment over 90 days.

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

Amdocs  vs.  Dolby Laboratories

Amdocs

Risk-Adjusted Performance

Weakest

Over the last 90 days Amdocs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Dolby Laboratories

Risk-Adjusted Performance

Weakest

Over the last 90 days Dolby Laboratories has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Amdocs and Dolby Laboratories

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

The idea behind Amdocs and Dolby Laboratories 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.