Correlation Between AGF Management and Performance Food
Can any of the company-specific risk be diversified away by investing in both AGF Management and Performance Food 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 Performance Food 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 Performance Food Group, you can compare the effects of market volatilities on AGF Management and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Performance Food.
Diversification Opportunities for AGF Management and Performance Food
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGF and Performance is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of AGF Management i.e., AGF Management and Performance Food go up and down completely randomly.
Pair Corralation between AGF Management and Performance Food
Assuming the 90 days horizon AGF Management Limited is expected to under-perform the Performance Food. But the stock apears to be less risky and, when comparing its historical volatility, AGF Management Limited is 1.09 times less risky than Performance Food. The stock trades about -0.05 of its potential returns per unit of risk. The Performance Food Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7,850 in Performance Food Group on September 19, 2024 and sell it today you would earn a total of 400.00 from holding Performance Food Group or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
AGF Management Limited vs. Performance Food Group
Performance |
| Timeline |
| AGF Management |
| Performance Food |
AGF Management and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Performance Food
The main advantage of trading using opposite AGF Management and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| AGF Management vs. Entravision Communications | AGF Management vs. INSURANCE AUST GRP | AGF Management vs. Universal Display | AGF Management vs. SBI Insurance Group |
| Performance Food vs. AGF Management Limited | Performance Food vs. Meiko Electronics Co | Performance Food vs. Sims Metal Management | Performance Food vs. Corporate Travel Management |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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