Correlation Between AGF Management and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both AGF Management and BW OFFSHORE 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 BW OFFSHORE 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 BW OFFSHORE LTD, you can compare the effects of market volatilities on AGF Management and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and BW OFFSHORE.
Diversification Opportunities for AGF Management and BW OFFSHORE
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGF and XY81 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of AGF Management i.e., AGF Management and BW OFFSHORE go up and down completely randomly.
Pair Corralation between AGF Management and BW OFFSHORE
Assuming the 90 days horizon AGF Management Limited is expected to generate 0.86 times more return on investment than BW OFFSHORE. However, AGF Management Limited is 1.16 times less risky than BW OFFSHORE. It trades about 0.08 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.03 per unit of risk. If you would invest 374.00 in AGF Management Limited on August 29, 2024 and sell it today you would earn a total of 351.00 from holding AGF Management Limited or generate 93.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. BW OFFSHORE LTD
Performance |
| Timeline |
| AGF Management |
| BW OFFSHORE LTD |
AGF Management and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and BW OFFSHORE
The main advantage of trading using opposite AGF Management and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| AGF Management vs. Diamondrock Hospitality Co | AGF Management vs. Ramsay Health Care | AGF Management vs. THRACE PLASTICS | AGF Management vs. DiamondRock Hospitality |
| BW OFFSHORE vs. BORR DRILLING NEW | BW OFFSHORE vs. CI GAMES SA | BW OFFSHORE vs. HOCHSCHILD MINING | BW OFFSHORE vs. TSOGO SUN GAMING |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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