Correlation Between AGM Group and HP

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

By analyzing existing cross correlation between AGM Group Holdings and HP Inc, you can compare the effects of market volatilities on AGM Group and HP 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 AGM Group with a short position of HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGM Group and HP.

Diversification Opportunities for AGM Group and HP

0.26

Correlation Coefficient

AGM Group  HP

Modest diversification

The 3 months correlation between AGM and HP is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding AGM Group Holdings and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP Inc and AGM Group 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 AGM Group Holdings are associated (or correlated) with HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of AGM Group i.e., AGM Group and HP go up and down completely randomly.

Pair Corralation between AGM Group and HP

Given the investment horizon of 90 days AGM Group Holdings is expected to under-perform the HP. In addition to that, AGM Group is 1.5 times more volatile than HP Inc. It trades about -0.31 of its total potential returns per unit of risk. HP Inc is currently generating about -0.23 per unit of volatility. If you would invest  3,897  in HP Inc on September 25, 2024 and sell it today you would lose (553.00) from holding HP Inc or give up 14.19% of portfolio value over 90 days.

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

AGM Group Holdings  vs.  HP Inc

AGM Group Holdings

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days AGM Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, AGM Group is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

HP Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HP is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with AGM Group and HP

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

The idea behind AGM Group Holdings and HP Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.