Correlation Between Food Life and AGF Management
Can any of the company-specific risk be diversified away by investing in both Food Life and AGF Management 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 Food Life and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and AGF Management Limited, you can compare the effects of market volatilities on Food Life and AGF Management 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 Food Life with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and AGF Management.
Diversification Opportunities for Food Life and AGF Management
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Food and AGF is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Food Life 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 Food Life Companies are associated (or correlated) with AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Food Life i.e., Food Life and AGF Management go up and down completely randomly.
Pair Corralation between Food Life and AGF Management
Assuming the 90 days horizon Food Life Companies is expected to generate 1.42 times more return on investment than AGF Management. However, Food Life is 1.42 times more volatile than AGF Management Limited. It trades about 0.46 of its potential returns per unit of risk. AGF Management Limited is currently generating about -0.02 per unit of risk. If you would invest 1,880 in Food Life Companies on September 15, 2024 and sell it today you would earn a total of 320.00 from holding Food Life Companies or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Food Life Companies vs. AGF Management Limited
Performance |
| Timeline |
| Food Life Companies |
| AGF Management |
Food Life and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and AGF Management
The main advantage of trading using opposite Food Life and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life position performs unexpectedly, AGF Management 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 AGF Management will offset losses from the drop in AGF Management's long position.| Food Life vs. Starbucks | Food Life vs. Superior Plus Corp | Food Life vs. SIVERS SEMICONDUCTORS AB | Food Life vs. NorAm Drilling AS |
| AGF Management vs. Food Life Companies | AGF Management vs. HK Electric Investments | AGF Management vs. JJ SNACK FOODS | AGF Management vs. Chuangs China Investments |
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 Stocks Directory module to find actively traded stocks across global markets.
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