Correlation Between AGL Energy and EnVVeno Medical

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

By analyzing existing cross correlation between AGL Energy Limited and enVVeno Medical Corp, you can compare the effects of market volatilities on AGL Energy and EnVVeno Medical 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 AGL Energy with a short position of EnVVeno Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGL Energy and EnVVeno Medical.

Diversification Opportunities for AGL Energy and EnVVeno Medical

-0.56

Correlation Coefficient

AGL Energy  EnVVeno Medical

Excellent diversification

The 3 months correlation between AGL and EnVVeno is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding AGL Energy Limited and enVVeno Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enVVeno Medical Corp and AGL Energy 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 AGL Energy Limited are associated (or correlated) with EnVVeno Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enVVeno Medical Corp has no effect on the direction of AGL Energy i.e., AGL Energy and EnVVeno Medical go up and down completely randomly.

Pair Corralation between AGL Energy and EnVVeno Medical

If you would invest  302.00  in enVVeno Medical Corp on October 8, 2024 and sell it today you would earn a total of  34.00  from holding enVVeno Medical Corp or generate 11.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

AGL Energy Limited  vs.  enVVeno Medical Corp

AGL Energy Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGL Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AGL Energy is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

enVVeno Medical Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in enVVeno Medical Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, EnVVeno Medical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGL Energy and EnVVeno Medical

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

The idea behind AGL Energy Limited and enVVeno Medical Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.