Correlation Between Agora SA and Echo Investment
Can any of the company-specific risk be diversified away by investing in both Agora SA and Echo Investment 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 Agora SA and Echo Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agora SA and Echo Investment SA, you can compare the effects of market volatilities on Agora SA and Echo Investment 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 Agora SA with a short position of Echo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agora SA and Echo Investment.
Diversification Opportunities for Agora SA and Echo Investment
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agora and Echo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Agora SA and Echo Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Investment SA and Agora SA 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 Agora SA are associated (or correlated) with Echo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Investment SA has no effect on the direction of Agora SA i.e., Agora SA and Echo Investment go up and down completely randomly.
Pair Corralation between Agora SA and Echo Investment
Assuming the 90 days trading horizon Agora SA is expected to generate 1.29 times more return on investment than Echo Investment. However, Agora SA is 1.29 times more volatile than Echo Investment SA. It trades about 0.07 of its potential returns per unit of risk. Echo Investment SA is currently generating about 0.07 per unit of risk. If you would invest 486.00 in Agora SA on September 13, 2024 and sell it today you would earn a total of 391.00 from holding Agora SA or generate 80.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Agora SA vs. Echo Investment SA
Performance |
| Timeline |
| Agora SA |
| Echo Investment SA |
Agora SA and Echo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agora SA and Echo Investment
The main advantage of trading using opposite Agora SA and Echo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agora SA position performs unexpectedly, Echo Investment 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 Echo Investment will offset losses from the drop in Echo Investment's long position.| Agora SA vs. Echo Investment SA | Agora SA vs. CI Games SA | Agora SA vs. Gaming Factory SA | Agora SA vs. Skyline Investment SA |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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