Correlation Between AGF Management and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both AGF Management and Canaf 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 Canaf 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 Canaf Investments, you can compare the effects of market volatilities on AGF Management and Canaf 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 Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Canaf Investments.
Diversification Opportunities for AGF Management and Canaf Investments
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGF and Canaf is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf 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 Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of AGF Management i.e., AGF Management and Canaf Investments go up and down completely randomly.
Pair Corralation between AGF Management and Canaf Investments
Assuming the 90 days trading horizon AGF Management Limited is expected to generate 0.41 times more return on investment than Canaf Investments. However, AGF Management Limited is 2.42 times less risky than Canaf Investments. It trades about -0.01 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.14 per unit of risk. If you would invest 1,124 in AGF Management Limited on September 12, 2024 and sell it today you would lose (5.00) from holding AGF Management Limited or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Canaf Investments
Performance |
| Timeline |
| AGF Management |
| Canaf Investments |
AGF Management and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Canaf Investments
The main advantage of trading using opposite AGF Management and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Canaf 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| AGF Management vs. Brompton Lifeco Split | AGF Management vs. North American Financial | AGF Management vs. Prime Dividend Corp | AGF Management vs. Financial 15 Split |
| Canaf Investments vs. Ressources Minieres Radisson | Canaf Investments vs. Galantas Gold Corp | Canaf Investments vs. Red Pine Exploration | Canaf Investments vs. Kore Mining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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