Correlation Between Agile Content and Atom Hoteles

Can any of the company-specific risk be diversified away by investing in both Agile Content and Atom Hoteles 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 Atom Hoteles 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 Atom Hoteles Socimi, you can compare the effects of market volatilities on Agile Content and Atom Hoteles 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 Atom Hoteles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agile Content and Atom Hoteles.

Diversification Opportunities for Agile Content and Atom Hoteles

0.13

Correlation Coefficient

Agile Content  Atom Hoteles

Average diversification

The 3 months correlation between Agile and Atom is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Agile Content SA and Atom Hoteles Socimi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atom Hoteles Socimi 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 Atom Hoteles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atom Hoteles Socimi has no effect on the direction of Agile Content i.e., Agile Content and Atom Hoteles go up and down completely randomly.

Pair Corralation between Agile Content and Atom Hoteles

Assuming the 90 days trading horizon Agile Content SA is expected to under-perform the Atom Hoteles. But the stock apears to be less risky and, when comparing its historical volatility, Agile Content SA is 2.33 times less risky than Atom Hoteles. The stock trades about -0.04 of its potential returns per unit of risk. The Atom Hoteles Socimi is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  975.00  in Atom Hoteles Socimi on September 12, 2024 and sell it today you would earn a total of  425.00  from holding Atom Hoteles Socimi or generate 43.59% return on investment over 90 days.

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

Agile Content SA  vs.  Atom Hoteles Socimi

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 rather sound fundamental indicators, Agile Content is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Atom Hoteles Socimi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atom Hoteles Socimi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Atom Hoteles exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agile Content and Atom Hoteles

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

The idea behind Agile Content SA and Atom Hoteles Socimi 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.