Correlation Between Where Food and Agilysys

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

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

Diversification Opportunities for Where Food and Agilysys

0.31

Correlation Coefficient

Where Food  Agilysys

Weak diversification

The 3 months correlation between Where and Agilysys is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and Agilysys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilysys and Where Food 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 Where Food Comes 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 Where Food i.e., Where Food and Agilysys go up and down completely randomly.

Pair Corralation between Where Food and Agilysys

Given the investment horizon of 90 days Where Food is expected to generate 2.91 times less return on investment than Agilysys. But when comparing it to its historical volatility, Where Food Comes is 1.05 times less risky than Agilysys. It trades about 0.03 of its potential returns per unit of risk. Agilysys is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,461  in Agilysys on January 26, 2024 and sell it today you would earn a total of  4,925  from holding Agilysys or generate 142.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Where Food Comes  vs.  Agilysys

Where Food Comes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Where Food Comes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Agilysys

Risk-Adjusted Performance

0 of 100

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 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.

Pair Trading with Where Food and Agilysys

The main advantage of trading using opposite Where Food and Agilysys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food 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 Where Food Comes 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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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.