Correlation Between AGF Management and Bip Investment
Can any of the company-specific risk be diversified away by investing in both AGF Management and Bip Investment 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 Bip Investment 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 Bip Investment Corp, you can compare the effects of market volatilities on AGF Management and Bip Investment 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 Bip Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Bip Investment.
Diversification Opportunities for AGF Management and Bip Investment
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGF and Bip is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Bip Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bip Investment 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 Bip Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bip Investment Corp has no effect on the direction of AGF Management i.e., AGF Management and Bip Investment go up and down completely randomly.
Pair Corralation between AGF Management and Bip Investment
Assuming the 90 days trading horizon AGF Management Limited is expected to generate 4.31 times more return on investment than Bip Investment. However, AGF Management is 4.31 times more volatile than Bip Investment Corp. It trades about 0.16 of its potential returns per unit of risk. Bip Investment Corp is currently generating about 0.11 per unit of risk. If you would invest 1,043 in AGF Management Limited on August 31, 2024 and sell it today you would earn a total of 62.00 from holding AGF Management Limited or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Bip Investment Corp
Performance |
| Timeline |
| AGF Management |
| Bip Investment Corp |
AGF Management and Bip Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Bip Investment
The main advantage of trading using opposite AGF Management and Bip Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Bip Investment 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 Bip Investment will offset losses from the drop in Bip Investment's long position.| AGF Management vs. IGM Financial | AGF Management vs. CI Financial Corp | AGF Management vs. iA Financial | AGF Management vs. Transcontinental |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |