Correlation Between AGF Management and Alliance Mining
Can any of the company-specific risk be diversified away by investing in both AGF Management and Alliance Mining 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 Alliance Mining 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 Alliance Mining Corp, you can compare the effects of market volatilities on AGF Management and Alliance Mining 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 Alliance Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Alliance Mining.
Diversification Opportunities for AGF Management and Alliance Mining
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and Alliance is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Alliance Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Mining Corp 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 Alliance Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Mining Corp has no effect on the direction of AGF Management i.e., AGF Management and Alliance Mining go up and down completely randomly.
Pair Corralation between AGF Management and Alliance Mining
Assuming the 90 days trading horizon AGF Management is expected to generate 1.41 times less return on investment than Alliance Mining. But when comparing it to its historical volatility, AGF Management Limited is 4.34 times less risky than Alliance Mining. It trades about 0.11 of its potential returns per unit of risk. Alliance Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Alliance Mining Corp on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Alliance Mining Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
AGF Management Limited vs. Alliance Mining Corp
Performance |
| Timeline |
| AGF Management |
| Alliance Mining Corp |
AGF Management and Alliance Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Alliance Mining
The main advantage of trading using opposite AGF Management and Alliance Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Alliance Mining 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 Alliance Mining will offset losses from the drop in Alliance Mining's long position.| AGF Management vs. Berkshire Hathaway CDR | AGF Management vs. E L Financial Corp | AGF Management vs. E L Financial 3 | AGF Management vs. Molson Coors Canada |
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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 Directory module to find actively traded commodities issued by global exchanges.
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