Correlation Between Mallinckrodt Plc and Agile Thrpe

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

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

Diversification Opportunities for Mallinckrodt Plc and Agile Thrpe

0.0

Correlation Coefficient

Mallinckrodt Plc  Agile Thrpe

Pay attention - limited upside

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

Pair Corralation between Mallinckrodt Plc and Agile Thrpe

If you would invest (100.00) in Agile Thrpe on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Agile Thrpe or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mallinckrodt Plc  vs.  Agile Thrpe

Mallinckrodt Plc

Risk-Adjusted Performance

Very Weak

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

Agile Thrpe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agile Thrpe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Agile Thrpe is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mallinckrodt Plc and Agile Thrpe

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

The idea behind Mallinckrodt Plc and Agile Thrpe 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.