Correlation Between AGF Management and AdvanSix
Can any of the company-specific risk be diversified away by investing in both AGF Management and AdvanSix 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 AdvanSix 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 AdvanSix, you can compare the effects of market volatilities on AGF Management and AdvanSix 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 AdvanSix. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and AdvanSix.
Diversification Opportunities for AGF Management and AdvanSix
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGF and AdvanSix is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and AdvanSix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvanSix 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 AdvanSix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvanSix has no effect on the direction of AGF Management i.e., AGF Management and AdvanSix go up and down completely randomly.
Pair Corralation between AGF Management and AdvanSix
Assuming the 90 days horizon AGF Management Limited is expected to generate 0.76 times more return on investment than AdvanSix. However, AGF Management Limited is 1.32 times less risky than AdvanSix. It trades about 0.11 of its potential returns per unit of risk. AdvanSix is currently generating about 0.04 per unit of risk. If you would invest 432.00 in AGF Management Limited on September 14, 2024 and sell it today you would earn a total of 303.00 from holding AGF Management Limited or generate 70.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
AGF Management Limited vs. AdvanSix
Performance |
| Timeline |
| AGF Management |
| AdvanSix |
AGF Management and AdvanSix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and AdvanSix
The main advantage of trading using opposite AGF Management and AdvanSix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, AdvanSix 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 AdvanSix will offset losses from the drop in AdvanSix's long position.| AGF Management vs. New Residential Investment | AGF Management vs. FIREWEED METALS P | AGF Management vs. REGAL ASIAN INVESTMENTS | AGF Management vs. CDL 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 the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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