Correlation Between ANGI Homeservices and Shutterstock

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

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

Diversification Opportunities for ANGI Homeservices and Shutterstock

0.62

Correlation Coefficient

ANGI Homeservices  Shutterstock

Poor diversification

The 3 months correlation between ANGI and Shutterstock is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ANGI Homeservices and Shutterstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shutterstock and ANGI Homeservices 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 ANGI Homeservices are associated (or correlated) with Shutterstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shutterstock has no effect on the direction of ANGI Homeservices i.e., ANGI Homeservices and Shutterstock go up and down completely randomly.

Pair Corralation between ANGI Homeservices and Shutterstock

Given the investment horizon of 90 days ANGI Homeservices is expected to under-perform the Shutterstock. In addition to that, ANGI Homeservices is 1.61 times more volatile than Shutterstock. It trades about -0.1 of its total potential returns per unit of risk. Shutterstock is currently generating about -0.03 per unit of volatility. If you would invest  3,402  in Shutterstock on September 3, 2024 and sell it today you would lose (234.00) from holding Shutterstock or give up 6.88% of portfolio value over 90 days.

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

ANGI Homeservices  vs.  Shutterstock

ANGI Homeservices

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGI Homeservices has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Shutterstock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shutterstock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Shutterstock is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with ANGI Homeservices and Shutterstock

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

The idea behind ANGI Homeservices and Shutterstock 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.