Correlation Between Agile Content and Grenergy Renovables

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

By analyzing existing cross correlation between Agile Content SA and Grenergy Renovables SA, you can compare the effects of market volatilities on Agile Content and Grenergy Renovables 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 Agile Content with a short position of Grenergy Renovables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agile Content and Grenergy Renovables.

Diversification Opportunities for Agile Content and Grenergy Renovables

0.03

Correlation Coefficient

Agile Content  Grenergy Renovables

Significant diversification

The 3 months correlation between Agile and Grenergy is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Agile Content SA and Grenergy Renovables SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grenergy Renovables and Agile Content 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 Agile Content SA are associated (or correlated) with Grenergy Renovables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grenergy Renovables has no effect on the direction of Agile Content i.e., Agile Content and Grenergy Renovables go up and down completely randomly.

Pair Corralation between Agile Content and Grenergy Renovables

Assuming the 90 days trading horizon Agile Content SA is expected to generate 0.85 times more return on investment than Grenergy Renovables. However, Agile Content SA is 1.17 times less risky than Grenergy Renovables. It trades about -0.05 of its potential returns per unit of risk. Grenergy Renovables SA is currently generating about -0.1 per unit of risk. If you would invest  330.00  in Agile Content SA on September 12, 2024 and sell it today you would lose (30.00) from holding Agile Content SA or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Agile Content SA  vs.  Grenergy Renovables SA

Agile Content SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agile Content SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Grenergy Renovables

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grenergy Renovables SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Agile Content and Grenergy Renovables

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

The idea behind Agile Content SA and Grenergy Renovables SA 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.