Correlation Between Nextdoor Holdings and ANGI Homeservices

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Can any of the company-specific risk be diversified away by investing in both Nextdoor Holdings and ANGI Homeservices 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 Nextdoor Holdings and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextdoor Holdings and ANGI Homeservices, you can compare the effects of market volatilities on Nextdoor Holdings and ANGI Homeservices 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 Nextdoor Holdings with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextdoor Holdings and ANGI Homeservices.

Diversification Opportunities for Nextdoor Holdings and ANGI Homeservices

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Nextdoor and ANGI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nextdoor Holdings and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Nextdoor Holdings 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 Nextdoor Holdings are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Nextdoor Holdings i.e., Nextdoor Holdings and ANGI Homeservices go up and down completely randomly.

Pair Corralation between Nextdoor Holdings and ANGI Homeservices

Given the investment horizon of 90 days Nextdoor Holdings is expected to generate 0.71 times more return on investment than ANGI Homeservices. However, Nextdoor Holdings is 1.41 times less risky than ANGI Homeservices. It trades about 0.0 of its potential returns per unit of risk. ANGI Homeservices is currently generating about -0.14 per unit of risk. If you would invest  248.00  in Nextdoor Holdings on September 28, 2024 and sell it today you would lose (6.00) from holding Nextdoor Holdings or give up 2.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nextdoor Holdings  vs.  ANGI Homeservices

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -40-30-20-10010
JavaScript chart by amCharts 3.21.15KIND ANGI
       Timeline  
Nextdoor Holdings 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Nextdoor Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nextdoor Holdings is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2.32.42.52.62.72.82.93
ANGI Homeservices 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ANGI Homeservices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.61.822.22.42.62.8

Nextdoor Holdings and ANGI Homeservices Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.89-3.66-2.43-1.21-0.02031.22.413.634.84 0.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15KIND ANGI
       Returns  

Pair Trading with Nextdoor Holdings and ANGI Homeservices

The main advantage of trading using opposite Nextdoor Holdings and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextdoor Holdings position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.
The idea behind Nextdoor Holdings and ANGI Homeservices 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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