Correlation Between AGF Management and Healthcare Services
Can any of the company-specific risk be diversified away by investing in both AGF Management and Healthcare Services 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 Healthcare Services 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 Healthcare Services Group, you can compare the effects of market volatilities on AGF Management and Healthcare Services 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 Healthcare Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Healthcare Services.
Diversification Opportunities for AGF Management and Healthcare Services
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and Healthcare is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Healthcare Services Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Services 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 Healthcare Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Services has no effect on the direction of AGF Management i.e., AGF Management and Healthcare Services go up and down completely randomly.
Pair Corralation between AGF Management and Healthcare Services
Assuming the 90 days horizon AGF Management is expected to generate 1.66 times less return on investment than Healthcare Services. But when comparing it to its historical volatility, AGF Management Limited is 1.04 times less risky than Healthcare Services. It trades about 0.2 of its potential returns per unit of risk. Healthcare Services Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Healthcare Services Group on September 2, 2024 and sell it today you would earn a total of 155.00 from holding Healthcare Services Group or generate 15.58% 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. Healthcare Services Group
Performance |
| Timeline |
| AGF Management |
| Healthcare Services |
AGF Management and Healthcare Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Healthcare Services
The main advantage of trading using opposite AGF Management and Healthcare Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Healthcare Services 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 Healthcare Services will offset losses from the drop in Healthcare Services' long position.| AGF Management vs. Ameriprise Financial | AGF Management vs. Ares Management Corp | AGF Management vs. Superior Plus Corp | AGF Management vs. NMI Holdings |
| Healthcare Services vs. 24SEVENOFFICE GROUP AB | Healthcare Services vs. CDN IMPERIAL BANK | Healthcare Services vs. KENEDIX OFFICE INV | Healthcare Services vs. Infrastrutture Wireless Italiane |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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