Correlation Between Agilysys and Progress Software
Can any of the company-specific risk be diversified away by investing in both Agilysys and Progress Software 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 Agilysys and Progress Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilysys and Progress Software, you can compare the effects of market volatilities on Agilysys and Progress Software 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 Agilysys with a short position of Progress Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilysys and Progress Software.
Diversification Opportunities for Agilysys and Progress Software
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agilysys and Progress is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agilysys and Progress Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progress Software and Agilysys 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 Agilysys are associated (or correlated) with Progress Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progress Software has no effect on the direction of Agilysys i.e., Agilysys and Progress Software go up and down completely randomly.
Pair Corralation between Agilysys and Progress Software
Given the investment horizon of 90 days Agilysys is expected to generate 1.75 times more return on investment than Progress Software. However, Agilysys is 1.75 times more volatile than Progress Software. It trades about 0.07 of its potential returns per unit of risk. Progress Software is currently generating about 0.05 per unit of risk. If you would invest 6,343 in Agilysys on August 27, 2024 and sell it today you would earn a total of 7,405 from holding Agilysys or generate 116.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilysys vs. Progress Software
Performance |
| Timeline |
| Agilysys |
| Progress Software |
Agilysys and Progress Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilysys and Progress Software
The main advantage of trading using opposite Agilysys and Progress Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilysys position performs unexpectedly, Progress Software 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 Progress Software will offset losses from the drop in Progress Software's long position.The idea behind Agilysys and Progress Software 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.| Progress Software vs. ePlus inc | Progress Software vs. Agilysys | Progress Software vs. Sapiens International | Progress Software vs. PDF Solutions |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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