Correlation Between Ideanomics and AGCO

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

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

Diversification Opportunities for Ideanomics and AGCO

0.5

Correlation Coefficient

Ideanomics  AGCO

Very weak diversification

The 3 months correlation between Ideanomics and AGCO is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO and Ideanomics 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 Ideanomics are associated (or correlated) with AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Ideanomics i.e., Ideanomics and AGCO go up and down completely randomly.

Pair Corralation between Ideanomics and AGCO

Given the investment horizon of 90 days Ideanomics is expected to generate 27.76 times more return on investment than AGCO. However, Ideanomics is 27.76 times more volatile than AGCO Corporation. It trades about -0.01 of its potential returns per unit of risk. AGCO Corporation is currently generating about -0.18 per unit of risk. If you would invest  20.00  in Ideanomics on September 26, 2024 and sell it today you would lose (19.43) from holding Ideanomics or give up 97.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Ideanomics  vs.  AGCO Corp.

Ideanomics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ideanomics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Ideanomics showed solid returns over the last few months and may actually be approaching a breakup point.

AGCO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGCO Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, AGCO is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ideanomics and AGCO

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

The idea behind Ideanomics and AGCO Corporation 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.