Correlation Between Agilysys and Momentive Global

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

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

Diversification Opportunities for Agilysys and Momentive Global

-0.52

Correlation Coefficient

Agilysys  Momentive Global

Excellent diversification

The 3 months correlation between Agilysys and Momentive is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Agilysys and Momentive Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Momentive Global and Agilysys 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 Agilysys are associated (or correlated) with Momentive Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Momentive Global has no effect on the direction of Agilysys i.e., Agilysys and Momentive Global go up and down completely randomly.

Pair Corralation between Agilysys and Momentive Global

Given the investment horizon of 90 days Agilysys is expected to generate 0.74 times more return on investment than Momentive Global. However, Agilysys is 1.35 times less risky than Momentive Global. It trades about 0.07 of its potential returns per unit of risk. Momentive Global is currently generating about 0.0 per unit of risk. If you would invest  3,806  in Agilysys on February 14, 2024 and sell it today you would earn a total of  4,215  from holding Agilysys or generate 110.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.13%
Values	Daily Returns

Agilysys  vs.  Momentive Global

Agilysys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilysys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Momentive Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Agilysys and Momentive Global

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

The idea behind Agilysys and Momentive Global 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.