diversifiable risk of combining Workiva and Agilysys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workiva and Agilysys, you can compare the effects of market volatilities on Workiva 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 Workiva with a short position of Agilysys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workiva and Agilysys.
Diversification Opportunities for Workiva and Agilysys
Pair Corralation between Workiva and Agilysys
Allowing for the 90-day total investment horizon Workiva is expected to under-perform the Agilysys. In addition to that, Workiva is 1.12 times more volatile than Agilysys. It trades about -0.07 of its total potential returns per unit of risk. Agilysys is currently generating about -0.04 per unit of volatility. If you would invest 8,197 in Agilysys on December 2, 2023 and sell it today you would lose (417.00) from holding Agilysys or give up 5.09% of portfolio value over 90 days.
Workiva vs. Agilysys
Pair Trading with Workiva and AgilysysThe main advantage of trading using opposite Workiva and Agilysys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workiva 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 Workiva 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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