Correlation Between AGM Group and Western Digital

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

Diversification Opportunities for AGM Group and Western Digital

-0.06

Correlation Coefficient

AGM Group  Western Digital

Good diversification

The 3 months correlation between AGM and Western is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AGM Group Holdings and Western Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Digital 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 Western Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Digital has no effect on the direction of AGM Group i.e., AGM Group and Western Digital go up and down completely randomly.

Pair Corralation between AGM Group and Western Digital

Given the investment horizon of 90 days AGM Group Holdings is expected to under-perform the Western Digital. In addition to that, AGM Group is 1.46 times more volatile than Western Digital. It trades about -0.15 of its total potential returns per unit of risk. Western Digital is currently generating about -0.16 per unit of volatility. If you would invest  6,643  in Western Digital on September 23, 2024 and sell it today you would lose (619.00) from holding Western Digital or give up 9.32% of portfolio value over 90 days.

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

AGM Group Holdings  vs.  Western Digital

AGM Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Western Digital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with AGM Group and Western Digital

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

The idea behind AGM Group Holdings and Western Digital 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.