Correlation Between Agilysys and DocuSign

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

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

Diversification Opportunities for Agilysys and DocuSign

0.04

Correlation Coefficient

Agilysys  DocuSign

Significant diversification

The 3 months correlation between Agilysys and DocuSign is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Agilysys and DocuSign in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DocuSign 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 DocuSign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DocuSign has no effect on the direction of Agilysys i.e., Agilysys and DocuSign go up and down completely randomly.

Pair Corralation between Agilysys and DocuSign

Given the investment horizon of 90 days Agilysys is expected to generate 1.13 times more return on investment than DocuSign. However, Agilysys is 1.13 times more volatile than DocuSign. It trades about 0.07 of its potential returns per unit of risk. DocuSign is currently generating about -0.05 per unit of risk. If you would invest  7,636  in Agilysys on January 17, 2024 and sell it today you would earn a total of  644.00  from holding Agilysys or generate 8.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Agilysys  vs.  DocuSign

Agilysys

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agilysys are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Agilysys may actually be approaching a critical reversion point that can send shares even higher in May 2024.

DocuSign

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Agilysys and DocuSign

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

The idea behind Agilysys and DocuSign 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.