Correlation Between Agora and Banzai International

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

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

Diversification Opportunities for Agora and Banzai International

-0.37

Correlation Coefficient

Agora  Banzai International

Very good diversification

The 3 months correlation between Agora and Banzai is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Agora Inc and Banzai International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banzai International and Agora 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 Agora Inc are associated (or correlated) with Banzai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banzai International has no effect on the direction of Agora i.e., Agora and Banzai International go up and down completely randomly.

Pair Corralation between Agora and Banzai International

Considering the 90-day investment horizon Agora Inc is expected to generate 0.66 times more return on investment than Banzai International. However, Agora Inc is 1.51 times less risky than Banzai International. It trades about 0.15 of its potential returns per unit of risk. Banzai International is currently generating about 0.07 per unit of risk. If you would invest  197.00  in Agora Inc on September 20, 2024 and sell it today you would earn a total of  256.00  from holding Agora Inc or generate 129.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.08%
Values	Daily Returns

Agora Inc  vs.  Banzai International

Agora Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agora Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Agora demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Banzai International

Risk-Adjusted Performance

5 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banzai International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, Banzai International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agora and Banzai International

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

The idea behind Agora Inc and Banzai International 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.