Correlation Between NXS and AGVC

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

By analyzing existing cross correlation between NXS and AGVC, you can compare the effects of market volatilities on NXS and AGVC 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 NXS with a short position of AGVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXS and AGVC.

Diversification Opportunities for NXS and AGVC

-0.82

Correlation Coefficient

NXS  AGVC

Pay attention - limited upside

The 3 months correlation between NXS and AGVC is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding NXS and AGVC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGVC and NXS 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 NXS are associated (or correlated) with AGVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGVC has no effect on the direction of NXS i.e., NXS and AGVC go up and down completely randomly.

Pair Corralation between NXS and AGVC

If you would invest  0.19  in AGVC on January 20, 2024 and sell it today you would earn a total of  0.00  from holding AGVC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

NXS  vs.  AGVC

NXS

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NXS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, NXS exhibited solid returns over the last few months and may actually be approaching a breakup point.

AGVC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGVC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AGVC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NXS and AGVC

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

The idea behind NXS and AGVC 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.