Correlation Between Varex Imaging and Agape ATP

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

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

Diversification Opportunities for Varex Imaging and Agape ATP

-0.52

Correlation Coefficient

Varex Imaging  Agape ATP

Excellent diversification

The 3 months correlation between Varex and Agape is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Agape ATP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agape ATP and Varex Imaging 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 Varex Imaging Corp are associated (or correlated) with Agape ATP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agape ATP has no effect on the direction of Varex Imaging i.e., Varex Imaging and Agape ATP go up and down completely randomly.

Pair Corralation between Varex Imaging and Agape ATP

Given the investment horizon of 90 days Varex Imaging Corp is expected to generate 0.27 times more return on investment than Agape ATP. However, Varex Imaging Corp is 3.66 times less risky than Agape ATP. It trades about -0.18 of its potential returns per unit of risk. Agape ATP is currently generating about -0.07 per unit of risk. If you would invest  1,531  in Varex Imaging Corp on October 8, 2024 and sell it today you would lose (105.00) from holding Varex Imaging Corp or give up 6.86% of portfolio value over 90 days.

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

Varex Imaging Corp  vs.  Agape ATP

Varex Imaging Corp

Risk-Adjusted Performance

13 of 100

Good

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

Agape ATP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Varex Imaging and Agape ATP

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

The idea behind Varex Imaging Corp and Agape ATP 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.