Correlation Between Bounce Mobile and Agronomics

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

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

Diversification Opportunities for Bounce Mobile and Agronomics

-0.83

Correlation Coefficient

Bounce Mobile  Agronomics

Pay attention - limited upside

The 3 months correlation between Bounce and Agronomics is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bounce Mobile Systems and Agronomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agronomics Limited and Bounce Mobile 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 Bounce Mobile Systems are associated (or correlated) with Agronomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agronomics Limited has no effect on the direction of Bounce Mobile i.e., Bounce Mobile and Agronomics go up and down completely randomly.

Pair Corralation between Bounce Mobile and Agronomics

Given the investment horizon of 90 days Bounce Mobile is expected to generate 2.44 times less return on investment than Agronomics. In addition to that, Bounce Mobile is 2.05 times more volatile than Agronomics Limited. It trades about 0.03 of its total potential returns per unit of risk. Agronomics Limited is currently generating about 0.16 per unit of volatility. If you would invest  4.65  in Agronomics Limited on December 30, 2024 and sell it today you would earn a total of  3.60  from holding Agronomics Limited or generate 77.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Bounce Mobile Systems  vs.  Agronomics Limited

Bounce Mobile Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bounce Mobile Systems are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Bounce Mobile displayed solid returns over the last few months and may actually be approaching a breakup point.

Agronomics Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agronomics Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Agronomics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bounce Mobile and Agronomics

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

The idea behind Bounce Mobile Systems and Agronomics Limited 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.