Correlation Between ANGI Homeservices and Groupon
Can any of the company-specific risk be diversified away by investing in both ANGI Homeservices and Groupon 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 ANGI Homeservices and Groupon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGI Homeservices and Groupon, you can compare the effects of market volatilities on ANGI Homeservices and Groupon 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 ANGI Homeservices with a short position of Groupon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGI Homeservices and Groupon.
Diversification Opportunities for ANGI Homeservices and Groupon
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ANGI and Groupon is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ANGI Homeservices and Groupon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupon and ANGI Homeservices 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 ANGI Homeservices are associated (or correlated) with Groupon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupon has no effect on the direction of ANGI Homeservices i.e., ANGI Homeservices and Groupon go up and down completely randomly.
Pair Corralation between ANGI Homeservices and Groupon
Given the investment horizon of 90 days ANGI Homeservices is expected to generate 0.96 times more return on investment than Groupon. However, ANGI Homeservices is 1.04 times less risky than Groupon. It trades about 0.01 of its potential returns per unit of risk. Groupon is currently generating about -0.05 per unit of risk. If you would invest 215.00 in ANGI Homeservices on August 24, 2024 and sell it today you would lose (19.00) from holding ANGI Homeservices or give up 8.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGI Homeservices vs. Groupon
Performance |
| Timeline |
| ANGI Homeservices |
| Groupon |
ANGI Homeservices and Groupon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGI Homeservices and Groupon
The main advantage of trading using opposite ANGI Homeservices and Groupon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGI Homeservices position performs unexpectedly, Groupon 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 Groupon will offset losses from the drop in Groupon's long position.| ANGI Homeservices vs. Match Group | ANGI Homeservices vs. Outbrain | ANGI Homeservices vs. MediaAlpha | ANGI Homeservices vs. YY Inc Class |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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