Correlation Between AGVC and AEON

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

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

Diversification Opportunities for AGVC and AEON

0.23

Correlation Coefficient

AGVC  AEON

Modest diversification

The 3 months correlation between AGVC and AEON is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AGVC and AEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON and AGVC 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 AGVC are associated (or correlated) with AEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON has no effect on the direction of AGVC i.e., AGVC and AEON go up and down completely randomly.

Pair Corralation between AGVC and AEON

If you would invest  15.00  in AEON on August 30, 2024 and sell it today you would earn a total of  9.00  from holding AEON or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

AGVC  vs.  AEON

AGVC

Risk-Adjusted Performance

0 of 100

Very Weak

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

AEON

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AEON are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, AEON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGVC and AEON

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

The idea behind AGVC and AEON 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.