Correlation Between Dave and Agilysys

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

Diversification Opportunities for Dave and Agilysys

  Correlation Coefficient

Modest diversification

The 3 months correlation between Dave and Agilysys is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dave Inc and Agilysys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilysys and Dave 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 Dave Inc are associated (or correlated) with Agilysys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilysys has no effect on the direction of Dave i.e., Dave and Agilysys go up and down completely randomly.

Pair Corralation between Dave and Agilysys

Given the investment horizon of 90 days Dave Inc is expected to under-perform the Agilysys. In addition to that, Dave is 1.26 times more volatile than Agilysys. It trades about -0.39 of its total potential returns per unit of risk. Agilysys is currently generating about 0.01 per unit of volatility. If you would invest  7,991  in Agilysys on December 26, 2022 and sell it today you would lose (35.00)  from holding Agilysys or give up 0.44% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Dave Inc  vs.  Agilysys

 Performance (%) 
Dave Inc 

Dave Performance

0 of 100

Over the last 90 days Dave Inc 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 rather sound which may send shares a bit higher in April 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Agilysys Performance

1 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Agilysys are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Agilysys is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Dave and Agilysys Volatility Contrast

   Predicted Return Density   

Pair Trading with Dave and Agilysys

The main advantage of trading using opposite Dave and Agilysys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dave position performs unexpectedly, Agilysys 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 Agilysys will offset losses from the drop in Agilysys' long position.
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The idea behind Dave Inc and Agilysys 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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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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