Correlation Between Agile Thrpe and Sohm

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

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

Diversification Opportunities for Agile Thrpe and Sohm

-0.38

Correlation Coefficient

Agile Thrpe  Sohm

Very good diversification

The 3 months correlation between Agile and Sohm is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Agile Thrpe and Sohm Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sohm Inc and Agile Thrpe 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 Thrpe are associated (or correlated) with Sohm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sohm Inc has no effect on the direction of Agile Thrpe i.e., Agile Thrpe and Sohm go up and down completely randomly.

Pair Corralation between Agile Thrpe and Sohm

If you would invest  0.08  in Sohm Inc on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Sohm Inc or generate 0.0% return on investment over 90 days.

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

Agile Thrpe  vs.  Sohm Inc

Agile Thrpe

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sohm Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sohm Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Sohm is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Agile Thrpe and Sohm

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

The idea behind Agile Thrpe and Sohm 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.