Correlation Between Agilysys and SSC Technologies

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Can any of the company-specific risk be diversified away by investing in both Agilysys and SSC Technologies 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 Agilysys and SSC Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilysys and SSC Technologies Holdings, you can compare the effects of market volatilities on Agilysys and SSC Technologies 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 Agilysys with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilysys and SSC Technologies.

Diversification Opportunities for Agilysys and SSC Technologies

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Agilysys and SSC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Agilysys and SSC Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies Holdings and Agilysys 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 Agilysys are associated (or correlated) with SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies Holdings has no effect on the direction of Agilysys i.e., Agilysys and SSC Technologies go up and down completely randomly.

Pair Corralation between Agilysys and SSC Technologies

Given the investment horizon of 90 days Agilysys is expected to generate 2.65 times more return on investment than SSC Technologies. However, Agilysys is 2.65 times more volatile than SSC Technologies Holdings. It trades about 0.06 of its potential returns per unit of risk. SSC Technologies Holdings is currently generating about -0.07 per unit of risk. If you would invest  13,224  in Agilysys on October 1, 2024 and sell it today you would earn a total of  334.00  from holding Agilysys or generate 2.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Agilysys  vs.  SSC Technologies Holdings

 Performance 
       Timeline  
Agilysys 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Agilysys are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Agilysys unveiled solid returns over the last few months and may actually be approaching a breakup point.
SSC Technologies Holdings 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SSC Technologies Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SSC Technologies is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Agilysys and SSC Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilysys and SSC Technologies

The main advantage of trading using opposite Agilysys and SSC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilysys position performs unexpectedly, SSC Technologies 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 SSC Technologies will offset losses from the drop in SSC Technologies' long position.
The idea behind Agilysys and SSC Technologies Holdings 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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