Correlation Between AGF Management and DEVRY EDUCATION
Can any of the company-specific risk be diversified away by investing in both AGF Management and DEVRY EDUCATION 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 DEVRY EDUCATION 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 DEVRY EDUCATION GRP, you can compare the effects of market volatilities on AGF Management and DEVRY EDUCATION 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 DEVRY EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and DEVRY EDUCATION.
Diversification Opportunities for AGF Management and DEVRY EDUCATION
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and DEVRY is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and DEVRY EDUCATION GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEVRY EDUCATION GRP 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 DEVRY EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEVRY EDUCATION GRP has no effect on the direction of AGF Management i.e., AGF Management and DEVRY EDUCATION go up and down completely randomly.
Pair Corralation between AGF Management and DEVRY EDUCATION
Assuming the 90 days horizon AGF Management is expected to generate 2.39 times less return on investment than DEVRY EDUCATION. But when comparing it to its historical volatility, AGF Management Limited is 1.19 times less risky than DEVRY EDUCATION. It trades about 0.04 of its potential returns per unit of risk. DEVRY EDUCATION GRP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,740 in DEVRY EDUCATION GRP on November 1, 2024 and sell it today you would earn a total of 5,760 from holding DEVRY EDUCATION GRP or generate 154.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. DEVRY EDUCATION GRP
Performance |
| Timeline |
| AGF Management |
| DEVRY EDUCATION GRP |
AGF Management and DEVRY EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and DEVRY EDUCATION
The main advantage of trading using opposite AGF Management and DEVRY EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, DEVRY EDUCATION 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 DEVRY EDUCATION will offset losses from the drop in DEVRY EDUCATION's long position.| AGF Management vs. Keck Seng Investments | AGF Management vs. New Residential Investment | AGF Management vs. Insteel Industries | AGF Management vs. DIVERSIFIED ROYALTY |
| DEVRY EDUCATION vs. AGF Management Limited | DEVRY EDUCATION vs. Moneysupermarket Group PLC | DEVRY EDUCATION vs. PREMIER FOODS | DEVRY EDUCATION vs. Tyson Foods |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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