Correlation Between AGF Management and Dow
Can any of the company-specific risk be diversified away by investing in both AGF Management and Dow 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 Dow 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 Dow Inc, you can compare the effects of market volatilities on AGF Management and Dow 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 Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Dow.
Diversification Opportunities for AGF Management and Dow
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between AGF and Dow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Dow Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Inc 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 Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Inc has no effect on the direction of AGF Management i.e., AGF Management and Dow go up and down completely randomly.
Pair Corralation between AGF Management and Dow
Assuming the 90 days horizon AGF Management Limited is expected to generate 1.03 times more return on investment than Dow. However, AGF Management is 1.03 times more volatile than Dow Inc. It trades about 0.17 of its potential returns per unit of risk. Dow Inc is currently generating about 0.09 per unit of risk. If you would invest 693.00 in AGF Management Limited on October 25, 2024 and sell it today you would earn a total of 27.00 from holding AGF Management Limited or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Dow Inc
Performance |
| Timeline |
| AGF Management |
| Dow Inc |
AGF Management and Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Dow
The main advantage of trading using opposite AGF Management and Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Dow 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 Dow will offset losses from the drop in Dow's long position.| AGF Management vs. Blackstone Group | AGF Management vs. The Bank of | AGF Management vs. Ameriprise Financial | AGF Management vs. State Street |
| Dow vs. PennantPark Investment | Dow vs. Brockhaus Capital Management | Dow vs. Apollo Investment Corp | Dow vs. PennyMac Mortgage 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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