Correlation Between Key Tronic and AGM Group

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

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

Diversification Opportunities for Key Tronic and AGM Group

0.96

Correlation Coefficient

Key Tronic  AGM Group

Almost no diversification

The 3 months correlation between Key and AGM is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Key Tronic and AGM Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGM Group Holdings and Key Tronic 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 Key Tronic are associated (or correlated) with AGM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGM Group Holdings has no effect on the direction of Key Tronic i.e., Key Tronic and AGM Group go up and down completely randomly.

Pair Corralation between Key Tronic and AGM Group

Given the investment horizon of 90 days Key Tronic is expected to generate 0.18 times more return on investment than AGM Group. However, Key Tronic is 5.68 times less risky than AGM Group. It trades about -0.2 of its potential returns per unit of risk. AGM Group Holdings is currently generating about -0.15 per unit of risk. If you would invest  409.00  in Key Tronic on December 26, 2024 and sell it today you would lose (150.00) from holding Key Tronic or give up 36.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Key Tronic  vs.  AGM Group Holdings

Key Tronic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Key Tronic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

AGM Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGM Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Key Tronic and AGM Group

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

The idea behind Key Tronic and AGM Group Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.