Correlation Between Agilysys and ACV Auctions

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Can any of the company-specific risk be diversified away by investing in both Agilysys and ACV Auctions 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 ACV Auctions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilysys and ACV Auctions, you can compare the effects of market volatilities on Agilysys and ACV Auctions 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 ACV Auctions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilysys and ACV Auctions.

Diversification Opportunities for Agilysys and ACV Auctions

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Agilysys and ACV is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Agilysys and ACV Auctions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACV Auctions 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 ACV Auctions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACV Auctions has no effect on the direction of Agilysys i.e., Agilysys and ACV Auctions go up and down completely randomly.

Pair Corralation between Agilysys and ACV Auctions

Given the investment horizon of 90 days Agilysys is expected to generate 0.72 times more return on investment than ACV Auctions. However, Agilysys is 1.39 times less risky than ACV Auctions. It trades about 0.07 of its potential returns per unit of risk. ACV Auctions is currently generating about 0.03 per unit of risk. If you would invest  3,764  in Agilysys on December 29, 2023 and sell it today you would earn a total of  4,481  from holding Agilysys or generate 119.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Agilysys  vs.  ACV Auctions

 Performance 
       Timeline  
Agilysys 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 comparatively stable basic indicators, Agilysys is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
ACV Auctions 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in ACV Auctions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ACV Auctions sustained solid returns over the last few months and may actually be approaching a breakup point.

Agilysys and ACV Auctions Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agilysys and ACV Auctions

The main advantage of trading using opposite Agilysys and ACV Auctions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilysys position performs unexpectedly, ACV Auctions 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 ACV Auctions will offset losses from the drop in ACV Auctions' long position.
The idea behind Agilysys and ACV Auctions 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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