Correlation Between AGF Management and MACOM Technology
Can any of the company-specific risk be diversified away by investing in both AGF Management and MACOM Technology 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 AGF Management and MACOM Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGF Management Limited and MACOM Technology Solutions, you can compare the effects of market volatilities on AGF Management and MACOM Technology 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 AGF Management with a short position of MACOM Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and MACOM Technology.
Diversification Opportunities for AGF Management and MACOM Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGF and MACOM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol and AGF Management 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 AGF Management Limited are associated (or correlated) with MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of AGF Management i.e., AGF Management and MACOM Technology go up and down completely randomly.
Pair Corralation between AGF Management and MACOM Technology
Assuming the 90 days horizon AGF Management Limited is expected to generate 0.78 times more return on investment than MACOM Technology. However, AGF Management Limited is 1.29 times less risky than MACOM Technology. It trades about 0.14 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.11 per unit of risk. If you would invest 525.00 in AGF Management Limited on September 3, 2024 and sell it today you would earn a total of 215.00 from holding AGF Management Limited or generate 40.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. MACOM Technology Solutions
Performance |
| Timeline |
| AGF Management |
| MACOM Technology Sol |
AGF Management and MACOM Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and MACOM Technology
The main advantage of trading using opposite AGF Management and MACOM Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, MACOM Technology 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 MACOM Technology will offset losses from the drop in MACOM Technology's long position.| AGF Management vs. American Eagle Outfitters | AGF Management vs. Citic Telecom International | AGF Management vs. Warner Music Group | AGF Management vs. Spirent Communications plc |
| MACOM Technology vs. Casio Computer CoLtd | MACOM Technology vs. X FAB Silicon Foundries | MACOM Technology vs. FANDIFI TECHNOLOGY P | MACOM Technology vs. AECOM TECHNOLOGY |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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