Correlation Between AGF Management and DEUTSCHE BOERSE
Can any of the company-specific risk be diversified away by investing in both AGF Management and DEUTSCHE BOERSE 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 DEUTSCHE BOERSE 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 DEUTSCHE BOERSE ADR, you can compare the effects of market volatilities on AGF Management and DEUTSCHE BOERSE 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 DEUTSCHE BOERSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and DEUTSCHE BOERSE.
Diversification Opportunities for AGF Management and DEUTSCHE BOERSE
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGF and DEUTSCHE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and DEUTSCHE BOERSE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE BOERSE ADR 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 DEUTSCHE BOERSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE BOERSE ADR has no effect on the direction of AGF Management i.e., AGF Management and DEUTSCHE BOERSE go up and down completely randomly.
Pair Corralation between AGF Management and DEUTSCHE BOERSE
Assuming the 90 days horizon AGF Management Limited is expected to generate 1.79 times more return on investment than DEUTSCHE BOERSE. However, AGF Management is 1.79 times more volatile than DEUTSCHE BOERSE ADR. It trades about 0.05 of its potential returns per unit of risk. DEUTSCHE BOERSE ADR is currently generating about 0.09 per unit of risk. If you would invest 700.00 in AGF Management Limited on September 13, 2024 and sell it today you would earn a total of 25.00 from holding AGF Management Limited or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
AGF Management Limited vs. DEUTSCHE BOERSE ADR
Performance |
| Timeline |
| AGF Management |
| DEUTSCHE BOERSE ADR |
AGF Management and DEUTSCHE BOERSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and DEUTSCHE BOERSE
The main advantage of trading using opposite AGF Management and DEUTSCHE BOERSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, DEUTSCHE BOERSE 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 DEUTSCHE BOERSE will offset losses from the drop in DEUTSCHE BOERSE's long position.| AGF Management vs. Ameriprise Financial | AGF Management vs. Ares Management Corp | AGF Management vs. Superior Plus Corp | AGF Management vs. SIVERS SEMICONDUCTORS AB |
| DEUTSCHE BOERSE vs. CEOTRONICS | DEUTSCHE BOERSE vs. VULCAN MATERIALS | DEUTSCHE BOERSE vs. NEWELL RUBBERMAID | DEUTSCHE BOERSE vs. Materialise NV |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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