Correlation Between AGF Management and Birchtech Corp
Can any of the company-specific risk be diversified away by investing in both AGF Management and Birchtech Corp 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 Birchtech Corp 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 Birchtech Corp, you can compare the effects of market volatilities on AGF Management and Birchtech Corp 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 Birchtech Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Birchtech Corp.
Diversification Opportunities for AGF Management and Birchtech Corp
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AGF and Birchtech is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Birchtech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchtech 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 Birchtech Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchtech Corp has no effect on the direction of AGF Management i.e., AGF Management and Birchtech Corp go up and down completely randomly.
Pair Corralation between AGF Management and Birchtech Corp
Assuming the 90 days trading horizon AGF Management Limited is expected to generate 0.51 times more return on investment than Birchtech Corp. However, AGF Management Limited is 1.96 times less risky than Birchtech Corp. It trades about 0.15 of its potential returns per unit of risk. Birchtech Corp is currently generating about -0.11 per unit of risk. If you would invest 799.00 in AGF Management Limited on September 1, 2024 and sell it today you would earn a total of 321.00 from holding AGF Management Limited or generate 40.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 13.49% |
| Values | Daily Returns |
AGF Management Limited vs. Birchtech Corp
Performance |
| Timeline |
| AGF Management |
| Birchtech Corp |
AGF Management and Birchtech Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Birchtech Corp
The main advantage of trading using opposite AGF Management and Birchtech Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Birchtech Corp 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 Birchtech Corp will offset losses from the drop in Birchtech Corp's long position.| AGF Management vs. IGM Financial | AGF Management vs. CI Financial Corp | AGF Management vs. iA Financial | AGF Management vs. Transcontinental |
| Birchtech Corp vs. Apple Inc CDR | Birchtech Corp vs. NVIDIA CDR | Birchtech Corp vs. Microsoft Corp CDR | Birchtech Corp vs. Amazon CDR |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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