Correlation Between Agillic AS and SP Group

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

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

Diversification Opportunities for Agillic AS and SP Group

0.52

Correlation Coefficient

Agillic AS  SP Group

Very weak diversification

The 3 months correlation between Agillic and SPG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Agillic AS and SP Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Group AS and Agillic AS 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 Agillic AS are associated (or correlated) with SP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Group AS has no effect on the direction of Agillic AS i.e., Agillic AS and SP Group go up and down completely randomly.

Pair Corralation between Agillic AS and SP Group

Assuming the 90 days trading horizon Agillic AS is expected to generate 1.48 times less return on investment than SP Group. But when comparing it to its historical volatility, Agillic AS is 1.57 times less risky than SP Group. It trades about 0.05 of its potential returns per unit of risk. SP Group AS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  30,000  in SP Group AS on December 22, 2024 and sell it today you would earn a total of  1,350  from holding SP Group AS or generate 4.5% return on investment over 90 days.

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

Agillic AS  vs.  SP Group AS

Agillic AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agillic AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Agillic AS is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

SP Group AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SP Group AS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, SP Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Agillic AS and SP Group

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

The idea behind Agillic AS and SP Group AS 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.