Correlation Between AGF Management and Brookfield Investments
Can any of the company-specific risk be diversified away by investing in both AGF Management and Brookfield Investments 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 Brookfield Investments 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 Brookfield Investments, you can compare the effects of market volatilities on AGF Management and Brookfield Investments 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 Brookfield Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Brookfield Investments.
Diversification Opportunities for AGF Management and Brookfield Investments
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AGF and Brookfield is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Brookfield Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Investments 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 Brookfield Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Investments has no effect on the direction of AGF Management i.e., AGF Management and Brookfield Investments go up and down completely randomly.
Pair Corralation between AGF Management and Brookfield Investments
Assuming the 90 days trading horizon AGF Management Limited is expected to under-perform the Brookfield Investments. In addition to that, AGF Management is 11.31 times more volatile than Brookfield Investments. It trades about -0.17 of its total potential returns per unit of risk. Brookfield Investments is currently generating about -0.02 per unit of volatility. If you would invest 2,514 in Brookfield Investments on January 18, 2025 and sell it today you would lose (1.00) from holding Brookfield Investments or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
AGF Management Limited vs. Brookfield Investments
Performance |
| Timeline |
| AGF Management |
| Brookfield Investments |
AGF Management and Brookfield Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Brookfield Investments
The main advantage of trading using opposite AGF Management and Brookfield Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Brookfield Investments 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 Brookfield Investments will offset losses from the drop in Brookfield Investments' long position.| AGF Management vs. Cymbria | AGF Management vs. BMO Aggregate Bond | AGF Management vs. Solar Alliance Energy | AGF Management vs. EcoSynthetix |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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