Correlation Between AGF Management and OPERA SOFTWARE
Can any of the company-specific risk be diversified away by investing in both AGF Management and OPERA SOFTWARE 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 OPERA SOFTWARE 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 OPERA SOFTWARE, you can compare the effects of market volatilities on AGF Management and OPERA SOFTWARE 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 OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and OPERA SOFTWARE.
Diversification Opportunities for AGF Management and OPERA SOFTWARE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AGF and OPERA is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of AGF Management i.e., AGF Management and OPERA SOFTWARE go up and down completely randomly.
Pair Corralation between AGF Management and OPERA SOFTWARE
Assuming the 90 days horizon AGF Management Limited is expected to generate 0.9 times more return on investment than OPERA SOFTWARE. However, AGF Management Limited is 1.11 times less risky than OPERA SOFTWARE. It trades about 0.04 of its potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.0 per unit of risk. If you would invest 480.00 in AGF Management Limited on October 18, 2024 and sell it today you would earn a total of 185.00 from holding AGF Management Limited or generate 38.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. OPERA SOFTWARE
Performance |
| Timeline |
| AGF Management |
| OPERA SOFTWARE |
AGF Management and OPERA SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and OPERA SOFTWARE
The main advantage of trading using opposite AGF Management and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE's long position.| AGF Management vs. X FAB Silicon Foundries | AGF Management vs. SILICON LABORATOR | AGF Management vs. Siamgas And Petrochemicals | AGF Management vs. China Resources Beer |
| OPERA SOFTWARE vs. Gaztransport Technigaz SA | OPERA SOFTWARE vs. Brockhaus Capital Management | OPERA SOFTWARE vs. AGF Management Limited | OPERA SOFTWARE vs. Transport International Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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