Correlation Between Agora and Marin Software
Can any of the company-specific risk be diversified away by investing in both Agora and Marin 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 Agora and Marin Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agora Inc and Marin Software, you can compare the effects of market volatilities on Agora and Marin 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 Agora with a short position of Marin Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agora and Marin Software.
Diversification Opportunities for Agora and Marin Software
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Agora and Marin is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Agora Inc and Marin Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marin Software and Agora 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 Inc are associated (or correlated) with Marin Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marin Software has no effect on the direction of Agora i.e., Agora and Marin Software go up and down completely randomly.
Pair Corralation between Agora and Marin Software
Considering the 90-day investment horizon Agora Inc is expected to generate 0.74 times more return on investment than Marin Software. However, Agora Inc is 1.36 times less risky than Marin Software. It trades about 0.06 of its potential returns per unit of risk. Marin Software is currently generating about 0.03 per unit of risk. If you would invest 280.00 in Agora Inc on August 28, 2024 and sell it today you would earn a total of 196.00 from holding Agora Inc or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agora Inc vs. Marin Software
Performance |
| Timeline |
| Agora Inc |
| Marin Software |
Agora and Marin Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agora and Marin Software
The main advantage of trading using opposite Agora and Marin Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agora position performs unexpectedly, Marin 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 Marin Software will offset losses from the drop in Marin Software's long position.The idea behind Agora Inc and Marin 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.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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