Correlation Between Signet Jewelers and Agillic AS

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

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

Diversification Opportunities for Signet Jewelers and Agillic AS

0.39

Correlation Coefficient

Signet Jewelers  Agillic AS

Weak diversification

The 3 months correlation between Signet and Agillic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Signet Jewelers and Agillic AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agillic AS and Signet Jewelers 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 Signet Jewelers are associated (or correlated) with Agillic AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agillic AS has no effect on the direction of Signet Jewelers i.e., Signet Jewelers and Agillic AS go up and down completely randomly.

Pair Corralation between Signet Jewelers and Agillic AS

Considering the 90-day investment horizon Signet Jewelers is expected to generate 1.5 times more return on investment than Agillic AS. However, Signet Jewelers is 1.5 times more volatile than Agillic AS. It trades about 0.06 of its potential returns per unit of risk. Agillic AS is currently generating about -0.16 per unit of risk. If you would invest  9,512  in Signet Jewelers on January 25, 2024 and sell it today you would earn a total of  309.00  from holding Signet Jewelers or generate 3.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.36%
Values	Daily Returns

Signet Jewelers  vs.  Agillic AS

Signet Jewelers

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Signet Jewelers are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Signet Jewelers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Agillic AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agillic AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Signet Jewelers and Agillic AS

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

The idea behind Signet Jewelers and Agillic AS 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.