Correlation Between EGRNF and Agile Group

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

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

Diversification Opportunities for EGRNF and Agile Group

-0.38

Correlation Coefficient

EGRNF  Agile Group

Very good diversification

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

Pair Corralation between EGRNF and Agile Group

Assuming the 90 days horizon EGRNF is expected to generate 4.64 times more return on investment than Agile Group. However, EGRNF is 4.64 times more volatile than Agile Group Holdings. It trades about 0.2 of its potential returns per unit of risk. Agile Group Holdings is currently generating about 0.1 per unit of risk. If you would invest  0.30  in EGRNF on September 12, 2024 and sell it today you would lose (0.28) from holding EGRNF or give up 93.33% of portfolio value over 90 days.

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

EGRNF  vs.  Agile Group Holdings

EGRNF

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EGRNF are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, EGRNF reported solid returns over the last few months and may actually be approaching a breakup point.

Agile Group Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agile Group Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Agile Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EGRNF and Agile Group

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

The idea behind EGRNF and Agile Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.