Correlation Between Agilyx AS and BacTech Environmental

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

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

Diversification Opportunities for Agilyx AS and BacTech Environmental

-0.39

Correlation Coefficient

Agilyx AS  BacTech Environmental

Very good diversification

The 3 months correlation between Agilyx and BacTech is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Agilyx AS and BacTech Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BacTech Environmental and Agilyx AS 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 Agilyx AS are associated (or correlated) with BacTech Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BacTech Environmental has no effect on the direction of Agilyx AS i.e., Agilyx AS and BacTech Environmental go up and down completely randomly.

Pair Corralation between Agilyx AS and BacTech Environmental

Assuming the 90 days horizon Agilyx AS is expected to generate 1.18 times less return on investment than BacTech Environmental. But when comparing it to its historical volatility, Agilyx AS is 5.36 times less risky than BacTech Environmental. It trades about 0.09 of its potential returns per unit of risk. BacTech Environmental is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2.69  in BacTech Environmental on September 3, 2024 and sell it today you would lose (0.55) from holding BacTech Environmental or give up 20.45% of portfolio value over 90 days.

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

Agilyx AS  vs.  BacTech Environmental

Agilyx AS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agilyx AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Agilyx AS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BacTech Environmental

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BacTech Environmental are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, BacTech Environmental reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agilyx AS and BacTech Environmental

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

The idea behind Agilyx AS and BacTech Environmental 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 Global Correlations module to find global opportunities by holding instruments from different markets.