Correlation Between AGF Management and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both AGF Management and BURLINGTON STORES 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 BURLINGTON STORES 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 BURLINGTON STORES, you can compare the effects of market volatilities on AGF Management and BURLINGTON STORES 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 BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and BURLINGTON STORES.
Diversification Opportunities for AGF Management and BURLINGTON STORES
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGF and BURLINGTON is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of AGF Management i.e., AGF Management and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between AGF Management and BURLINGTON STORES
Assuming the 90 days horizon AGF Management Limited is expected to generate 0.89 times more return on investment than BURLINGTON STORES. However, AGF Management Limited is 1.12 times less risky than BURLINGTON STORES. It trades about -0.11 of its potential returns per unit of risk. BURLINGTON STORES is currently generating about -0.15 per unit of risk. If you would invest 725.00 in AGF Management Limited on December 13, 2024 and sell it today you would lose (60.00) from holding AGF Management Limited or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. BURLINGTON STORES
Performance |
| Timeline |
| AGF Management |
| BURLINGTON STORES |
AGF Management and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and BURLINGTON STORES
The main advantage of trading using opposite AGF Management and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, BURLINGTON STORES 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 BURLINGTON STORES will offset losses from the drop in BURLINGTON STORES's long position.| AGF Management vs. Heidelberg Materials AG | ||
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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