Correlation Between ANGI Homeservices and Opera

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

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

Diversification Opportunities for ANGI Homeservices and Opera

0.33

Correlation Coefficient

ANGI Homeservices  Opera

Weak diversification

The 3 months correlation between ANGI and Opera is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ANGI Homeservices and Opera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opera and ANGI Homeservices 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 ANGI Homeservices are associated (or correlated) with Opera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opera has no effect on the direction of ANGI Homeservices i.e., ANGI Homeservices and Opera go up and down completely randomly.

Pair Corralation between ANGI Homeservices and Opera

Given the investment horizon of 90 days ANGI Homeservices is expected to generate 1.05 times more return on investment than Opera. However, ANGI Homeservices is 1.05 times more volatile than Opera. It trades about 0.03 of its potential returns per unit of risk. Opera is currently generating about -0.02 per unit of risk. If you would invest  1,610  in ANGI Homeservices on December 28, 2024 and sell it today you would earn a total of  33.00  from holding ANGI Homeservices or generate 2.05% return on investment over 90 days.

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

ANGI Homeservices  vs.  Opera

ANGI Homeservices

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ANGI Homeservices are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, ANGI Homeservices is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Opera

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ANGI Homeservices and Opera

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

The idea behind ANGI Homeservices and Opera 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.

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.