Correlation Between Agillic AS and ALK Abell

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

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

Diversification Opportunities for Agillic AS and ALK Abell

-0.64

Correlation Coefficient

Agillic AS  ALK Abell

Excellent diversification

The 3 months correlation between Agillic and ALK is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Agillic AS and ALK Abell AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALK Abell AS and Agillic AS 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 Agillic AS are associated (or correlated) with ALK Abell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALK Abell AS has no effect on the direction of Agillic AS i.e., Agillic AS and ALK Abell go up and down completely randomly.

Pair Corralation between Agillic AS and ALK Abell

Assuming the 90 days trading horizon Agillic AS is expected to under-perform the ALK Abell. In addition to that, Agillic AS is 1.23 times more volatile than ALK Abell AS. It trades about -0.09 of its total potential returns per unit of risk. ALK Abell AS is currently generating about 0.2 per unit of volatility. If you would invest  12,240  in ALK Abell AS on February 1, 2024 and sell it today you would earn a total of  880.00  from holding ALK Abell AS or generate 7.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Agillic AS  vs.  ALK Abell AS

Agillic AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agillic AS 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 June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ALK Abell AS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALK Abell AS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, ALK Abell exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agillic AS and ALK Abell

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

The idea behind Agillic AS and ALK Abell AS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.