Correlation Between NEXTDC and AgileThought

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

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

Diversification Opportunities for NEXTDC and AgileThought

-0.2

Correlation Coefficient

NEXTDC  AgileThought

Good diversification

The 3 months correlation between NEXTDC and AgileThought is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding NEXTDC Limited and AgileThought in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgileThought and NEXTDC 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 NEXTDC Limited are associated (or correlated) with AgileThought. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgileThought has no effect on the direction of NEXTDC i.e., NEXTDC and AgileThought go up and down completely randomly.

Pair Corralation between NEXTDC and AgileThought

If you would invest  888.00  in NEXTDC Limited on September 26, 2024 and sell it today you would earn a total of  118.00  from holding NEXTDC Limited or generate 13.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

NEXTDC Limited  vs.  AgileThought

NEXTDC Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEXTDC Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, NEXTDC reported solid returns over the last few months and may actually be approaching a breakup point.

AgileThought

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgileThought has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, AgileThought is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with NEXTDC and AgileThought

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

The idea behind NEXTDC Limited and AgileThought 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.