Correlation Between Agile Content and Lleidanetworks Serveis

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

By analyzing existing cross correlation between Agile Content SA and Lleidanetworks Serveis Telematics, you can compare the effects of market volatilities on Agile Content and Lleidanetworks Serveis 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 Agile Content with a short position of Lleidanetworks Serveis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agile Content and Lleidanetworks Serveis.

Diversification Opportunities for Agile Content and Lleidanetworks Serveis

-0.7

Correlation Coefficient

Agile Content  Lleidanetworks Serveis

Excellent diversification

The 3 months correlation between Agile and Lleidanetworks is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Agile Content SA and Lleidanetworks Serveis Telemat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lleidanetworks Serveis and Agile Content 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 Agile Content SA are associated (or correlated) with Lleidanetworks Serveis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lleidanetworks Serveis has no effect on the direction of Agile Content i.e., Agile Content and Lleidanetworks Serveis go up and down completely randomly.

Pair Corralation between Agile Content and Lleidanetworks Serveis

Assuming the 90 days trading horizon Agile Content SA is expected to under-perform the Lleidanetworks Serveis. But the stock apears to be less risky and, when comparing its historical volatility, Agile Content SA is 1.22 times less risky than Lleidanetworks Serveis. The stock trades about -0.01 of its potential returns per unit of risk. The Lleidanetworks Serveis Telematics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  98.00  in Lleidanetworks Serveis Telematics on December 30, 2024 and sell it today you would earn a total of  15.00  from holding Lleidanetworks Serveis Telematics or generate 15.31% return on investment over 90 days.

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

Agile Content SA  vs.  Lleidanetworks Serveis Telemat

Agile Content SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agile Content SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Agile Content is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lleidanetworks Serveis

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lleidanetworks Serveis Telematics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Lleidanetworks Serveis exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agile Content and Lleidanetworks Serveis

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

The idea behind Agile Content SA and Lleidanetworks Serveis Telematics 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.