Correlation Between Agora and Liberty International
Can any of the company-specific risk be diversified away by investing in both Agora and Liberty International 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 Liberty International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agora Inc and Liberty International Holding, you can compare the effects of market volatilities on Agora and Liberty International 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 Liberty International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agora and Liberty International.
Diversification Opportunities for Agora and Liberty International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agora and Liberty is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Agora Inc and Liberty International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty International 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 Liberty International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty International has no effect on the direction of Agora i.e., Agora and Liberty International go up and down completely randomly.
Pair Corralation between Agora and Liberty International
If you would invest 437.00 in Agora Inc on November 3, 2024 and sell it today you would earn a total of 122.00 from holding Agora Inc or generate 27.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Agora Inc vs. Liberty International Holding
Performance |
| Timeline |
| Agora Inc |
| Liberty International |
Agora and Liberty International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agora and Liberty International
The main advantage of trading using opposite Agora and Liberty International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agora position performs unexpectedly, Liberty International 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 Liberty International will offset losses from the drop in Liberty International's long position.The idea behind Agora Inc and Liberty International Holding 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.| Liberty International vs. Greene Concepts | Liberty International vs. Fbec Worldwide | Liberty International vs. National Beverage Corp | Liberty International vs. Vita Coco |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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