Correlation Between AGF Management and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both AGF Management and Cogent Communications 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 Cogent Communications 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 Cogent Communications Holdings, you can compare the effects of market volatilities on AGF Management and Cogent Communications 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 Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Cogent Communications.
Diversification Opportunities for AGF Management and Cogent Communications
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and Cogent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent Communications 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 Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of AGF Management i.e., AGF Management and Cogent Communications go up and down completely randomly.
Pair Corralation between AGF Management and Cogent Communications
Assuming the 90 days horizon AGF Management Limited is expected to generate 0.67 times more return on investment than Cogent Communications. However, AGF Management Limited is 1.5 times less risky than Cogent Communications. It trades about -0.17 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.14 per unit of risk. If you would invest 698.00 in AGF Management Limited on October 17, 2024 and sell it today you would lose (23.00) from holding AGF Management Limited or give up 3.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Cogent Communications Holdings
Performance |
| Timeline |
| AGF Management |
| Cogent Communications |
AGF Management and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Cogent Communications
The main advantage of trading using opposite AGF Management and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Cogent Communications 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 Cogent Communications will offset losses from the drop in Cogent Communications' long position.| AGF Management vs. Highlight Communications AG | AGF Management vs. InPlay Oil Corp | AGF Management vs. LG Display Co | AGF Management vs. COMPUTERSHARE |
| Cogent Communications vs. CANON MARKETING JP | Cogent Communications vs. Strategic Education | Cogent Communications vs. IDP EDUCATION LTD | Cogent Communications vs. G8 EDUCATION |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |