Correlation Between Ferrovial and Agile Content

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

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

Diversification Opportunities for Ferrovial and Agile Content

-0.83

Correlation Coefficient

Ferrovial  Agile Content

Pay attention - limited upside

The 3 months correlation between Ferrovial and Agile is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ferrovial 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 Ferrovial 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 Ferrovial 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 Ferrovial i.e., Ferrovial and Agile Content go up and down completely randomly.

Pair Corralation between Ferrovial and Agile Content

Assuming the 90 days trading horizon Ferrovial is expected to generate 0.24 times more return on investment than Agile Content. However, Ferrovial is 4.24 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 -0.09 per unit of risk. If you would invest  4,067  in Ferrovial on October 9, 2024 and sell it today you would earn a total of  15.00  from holding Ferrovial or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ferrovial  vs.  Agile Content SA

Ferrovial

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ferrovial are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Ferrovial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 Ferrovial and Agile Content

The main advantage of trading using opposite Ferrovial and Agile Content positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrovial 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 Ferrovial 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.