Correlation Between Agile Thrpe and Mallinckrodt Plc

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

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

Diversification Opportunities for Agile Thrpe and Mallinckrodt Plc

0.0

Correlation Coefficient

Agile Thrpe  Mallinckrodt Plc

Pay attention - limited upside

The 3 months correlation between Agile and Mallinckrodt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Agile Thrpe and Mallinckrodt Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mallinckrodt Plc and Agile Thrpe 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 Thrpe are associated (or correlated) with Mallinckrodt Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mallinckrodt Plc has no effect on the direction of Agile Thrpe i.e., Agile Thrpe and Mallinckrodt Plc go up and down completely randomly.

Pair Corralation between Agile Thrpe and Mallinckrodt Plc

If you would invest (100.00) in Mallinckrodt Plc on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Mallinckrodt Plc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Agile Thrpe  vs.  Mallinckrodt Plc

Agile Thrpe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agile Thrpe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Agile Thrpe is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Mallinckrodt Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mallinckrodt Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Mallinckrodt Plc is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Agile Thrpe and Mallinckrodt Plc

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

The idea behind Agile Thrpe and Mallinckrodt Plc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.