Correlation Between Angi and Arena

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Can any of the company-specific risk be diversified away by investing in both Angi and Arena 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 Angi and Arena into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Angi Inc and The Arena Group, you can compare the effects of market volatilities on Angi and Arena 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 Angi with a short position of Arena. Check out your portfolio center. Please also check ongoing floating volatility patterns of Angi and Arena.

Diversification Opportunities for Angi and Arena

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Angi and Arena is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Angi Inc and The Arena Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Group and Angi 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 Angi Inc are associated (or correlated) with Arena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Group has no effect on the direction of Angi i.e., Angi and Arena go up and down completely randomly.

Pair Corralation between Angi and Arena

Given the investment horizon of 90 days Angi Inc is expected to under-perform the Arena. But the stock apears to be less risky and, when comparing its historical volatility, Angi Inc is 1.68 times less risky than Arena. The stock trades about -0.56 of its potential returns per unit of risk. The The Arena Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,068  in The Arena Group on June 29, 2022 and sell it today you would earn a total of  143.00  from holding The Arena Group or generate 13.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.24%
ValuesDaily Returns

Angi Inc  vs.  The Arena Group

 Performance (%) 
       Timeline  
Angi Inc 
Angi Performance
0 of 100
Over the last 90 days Angi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Angi Price Channel

Arena Group 
Arena Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in The Arena Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish technical and fundamental indicators, Arena disclosed solid returns over the last few months and may actually be approaching a breakup point.

Arena Price Channel

Angi and Arena Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Angi and Arena

The main advantage of trading using opposite Angi and Arena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Angi position performs unexpectedly, Arena 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 Arena will offset losses from the drop in Arena's long position.
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The idea behind Angi Inc and The Arena Group 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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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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