diversifiable risk of combining Innovativ Media and Agilysys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovativ Media Group and Agilysys, you can compare the effects of market volatilities on Innovativ Media 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 Innovativ Media with a short position of Agilysys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovativ Media and Agilysys.
Diversification Opportunities for Innovativ Media and Agilysys
Pair Corralation between Innovativ Media and Agilysys
Given the investment horizon of 90 days Innovativ Media Group is expected to under-perform the Agilysys. In addition to that, Innovativ Media is 3.62 times more volatile than Agilysys. It trades about -0.01 of its total potential returns per unit of risk. Agilysys is currently generating about 0.06 per unit of volatility. If you would invest 4,073 in Agilysys on November 27, 2023 and sell it today you would earn a total of 3,961 from holding Agilysys or generate 97.25% return on investment over 90 days.
Innovativ Media Group vs. Agilysys
Innovativ Media and Agilysys Volatility Contrast
Pair Trading with Innovativ Media and AgilysysThe main advantage of trading using opposite Innovativ Media and Agilysys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovativ Media 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. The idea behind Innovativ Media Group 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.
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 the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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