Correlation Between MARKET VECTR and CyberAgent

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

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

Diversification Opportunities for MARKET VECTR and CyberAgent

0.75

Correlation Coefficient

MARKET VECTR  CyberAgent

Poor diversification

The 3 months correlation between MARKET and CyberAgent is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent and MARKET VECTR 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 MARKET VECTR RETAIL are associated (or correlated) with CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of MARKET VECTR i.e., MARKET VECTR and CyberAgent go up and down completely randomly.

Pair Corralation between MARKET VECTR and CyberAgent

Assuming the 90 days trading horizon MARKET VECTR is expected to generate 1.13 times less return on investment than CyberAgent. But when comparing it to its historical volatility, MARKET VECTR RETAIL is 2.17 times less risky than CyberAgent. It trades about 0.19 of its potential returns per unit of risk. CyberAgent is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  605.00  in CyberAgent on October 23, 2024 and sell it today you would earn a total of  65.00  from holding CyberAgent or generate 10.74% return on investment over 90 days.

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

MARKET VECTR RETAIL  vs.  CyberAgent

MARKET VECTR RETAIL

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MARKET VECTR RETAIL are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MARKET VECTR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CyberAgent

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CyberAgent are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CyberAgent may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MARKET VECTR and CyberAgent

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

The idea behind MARKET VECTR RETAIL and CyberAgent 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.