Correlation Between AirBoss Of and AGC

Can any of the company-specific risk be diversified away by investing in both AirBoss Of and AGC 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 AirBoss Of and AGC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AirBoss of America and AGC Inc ADR, you can compare the effects of market volatilities on AirBoss Of and AGC 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 AirBoss Of with a short position of AGC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AirBoss Of and AGC.

Diversification Opportunities for AirBoss Of and AGC

0.44

Correlation Coefficient

AirBoss Of  AGC

Very weak diversification

The 3 months correlation between AirBoss and AGC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AirBoss of America and AGC Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGC Inc ADR and AirBoss Of 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 AirBoss of America are associated (or correlated) with AGC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGC Inc ADR has no effect on the direction of AirBoss Of i.e., AirBoss Of and AGC go up and down completely randomly.

Pair Corralation between AirBoss Of and AGC

Assuming the 90 days horizon AirBoss of America is expected to under-perform the AGC. In addition to that, AirBoss Of is 1.18 times more volatile than AGC Inc ADR. It trades about -0.23 of its total potential returns per unit of risk. AGC Inc ADR is currently generating about -0.02 per unit of volatility. If you would invest  618.00  in AGC Inc ADR on September 16, 2024 and sell it today you would lose (27.00) from holding AGC Inc ADR or give up 4.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AirBoss of America  vs.  AGC Inc ADR

AirBoss of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AirBoss of America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AGC Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGC Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, AGC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AirBoss Of and AGC

The main advantage of trading using opposite AirBoss Of and AGC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AirBoss Of position performs unexpectedly, AGC 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 AGC will offset losses from the drop in AGC's long position.

The idea behind AirBoss of America and AGC Inc ADR 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.