Correlation Between Micro Focus and AGM Group

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

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

Diversification Opportunities for Micro Focus and AGM Group

-0.55

Correlation Coefficient

Micro Focus  AGM Group

Excellent diversification

The 3 months correlation between Micro and AGM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Micro Focus International 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 Micro Focus 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 Micro Focus International 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 Micro Focus i.e., Micro Focus and AGM Group go up and down completely randomly.

Pair Corralation between Micro Focus and AGM Group

If you would invest  648.00  in Micro Focus International on February 5, 2024 and sell it today you would earn a total of  0.00  from holding Micro Focus International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Micro Focus International  vs.  AGM Group Holdings

Micro Focus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micro Focus International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Micro Focus is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

AGM Group Holdings

Risk-Adjusted Performance

0 of 100

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 June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Micro Focus and AGM Group

The main advantage of trading using opposite Micro Focus and AGM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Focus 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 Micro Focus International 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 Stocks Directory module to find actively traded stocks across global markets.