Correlation Between Global Dominion and Agile Content

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

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

Diversification Opportunities for Global Dominion and Agile Content

-0.38

Correlation Coefficient

Global Dominion  Agile Content

Very good diversification

The 3 months correlation between Global and Agile is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Global Dominion Access and Agile Content SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agile Content SA and Global Dominion 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 Global Dominion Access are associated (or correlated) with Agile Content. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agile Content SA has no effect on the direction of Global Dominion i.e., Global Dominion and Agile Content go up and down completely randomly.

Pair Corralation between Global Dominion and Agile Content

Assuming the 90 days trading horizon Global Dominion Access is expected to generate 0.55 times more return on investment than Agile Content. However, Global Dominion Access is 1.83 times less risky than Agile Content. It trades about -0.03 of its potential returns per unit of risk. Agile Content SA is currently generating about -0.05 per unit of risk. If you would invest  287.00  in Global Dominion Access on September 12, 2024 and sell it today you would lose (9.00) from holding Global Dominion Access or give up 3.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Global Dominion Access  vs.  Agile Content SA

Global Dominion Access

Risk-Adjusted Performance

0 of 100

Very Weak

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

Agile Content SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agile Content SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Global Dominion and Agile Content

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

The idea behind Global Dominion Access and Agile Content SA 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.