Correlation Between Innovativ Media and Agilysys

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Can any of the company-specific risk be diversified away by investing in both Innovativ Media 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 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

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Innovativ and Agilysys is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Innovativ Media Group and Agilysys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilysys and Innovativ Media 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 Innovativ Media Group 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 Innovativ Media i.e., Innovativ Media and Agilysys go up and down completely randomly.

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.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy47.38%
ValuesDaily Returns

Innovativ Media Group  vs.  Agilysys

 Performance 
       Timeline  
Innovativ Media Group 

Risk-Adjusted Performance

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Over the last 90 days Innovativ Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Innovativ Media is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Agilysys 

Risk-Adjusted Performance

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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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Innovativ Media and Agilysys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Innovativ Media and Agilysys

The 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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