Correlation Between Model N and Agent Information

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

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

Diversification Opportunities for Model N and Agent Information

0.3

Correlation Coefficient

Model N  Agent Information

Weak diversification

The 3 months correlation between Model and Agent is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Model N and Agent Information Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agent Information and Model N 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 Model N are associated (or correlated) with Agent Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agent Information has no effect on the direction of Model N i.e., Model N and Agent Information go up and down completely randomly.

Pair Corralation between Model N and Agent Information

If you would invest  100.00  in Agent Information Software on September 15, 2024 and sell it today you would earn a total of  54.00  from holding Agent Information Software or generate 54.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Model N  vs.  Agent Information Software

Model N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Model N has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Model N is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Agent Information

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agent Information Software are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Agent Information unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Model N and Agent Information

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

The idea behind Model N and Agent Information Software 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.