Correlation Between Formula Systems and AgileThought

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

By analyzing existing cross correlation between Formula Systems 1985 and AgileThought, you can compare the effects of market volatilities on Formula Systems and AgileThought 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 Formula Systems with a short position of AgileThought. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formula Systems and AgileThought.

Diversification Opportunities for Formula Systems and AgileThought

0.0

Correlation Coefficient

Formula Systems  AgileThought

Pay attention - limited upside

The 3 months correlation between Formula and AgileThought is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Formula Systems 1985 and AgileThought in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgileThought and Formula Systems 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 Formula Systems 1985 are associated (or correlated) with AgileThought. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgileThought has no effect on the direction of Formula Systems i.e., Formula Systems and AgileThought go up and down completely randomly.

Pair Corralation between Formula Systems and AgileThought

If you would invest  8,525  in Formula Systems 1985 on November 29, 2024 and sell it today you would earn a total of  1,135  from holding Formula Systems 1985 or generate 13.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Formula Systems 1985  vs.  AgileThought

Formula Systems 1985

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Formula Systems 1985 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Formula Systems showed solid returns over the last few months and may actually be approaching a breakup point.

AgileThought

Risk-Adjusted Performance

Very Weak

Over the last 90 days AgileThought has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, AgileThought is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Formula Systems and AgileThought

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

The idea behind Formula Systems 1985 and AgileThought 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.