Correlation Between Agile Thrpe and Durect

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

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

Diversification Opportunities for Agile Thrpe and Durect

0.02

Correlation Coefficient

Agile Thrpe  Durect

Significant diversification

The 3 months correlation between Agile and Durect is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Agile Thrpe and Durect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durect and Agile Thrpe 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 Agile Thrpe are associated (or correlated) with Durect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durect has no effect on the direction of Agile Thrpe i.e., Agile Thrpe and Durect go up and down completely randomly.

Pair Corralation between Agile Thrpe and Durect

Given the investment horizon of 90 days Agile Thrpe is expected to under-perform the Durect. In addition to that, Agile Thrpe is 1.33 times more volatile than Durect. It trades about -0.33 of its total potential returns per unit of risk. Durect is currently generating about 0.08 per unit of volatility. If you would invest  84.00  in Durect on February 13, 2024 and sell it today you would earn a total of  19.50  from holding Durect or generate 23.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	52.38%
Values	Daily Returns

Agile Thrpe  vs.  Durect

Agile Thrpe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agile Thrpe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Durect

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Durect are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Durect showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agile Thrpe and Durect

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

The idea behind Agile Thrpe and Durect 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.