Correlation Between AGF Management and Cogeco Communications
Can any of the company-specific risk be diversified away by investing in both AGF Management and Cogeco Communications 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 Cogeco Communications 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 Cogeco Communications, you can compare the effects of market volatilities on AGF Management and Cogeco Communications 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 Cogeco Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Cogeco Communications.
Diversification Opportunities for AGF Management and Cogeco Communications
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGF and Cogeco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Cogeco Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogeco Communications 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 Cogeco Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogeco Communications has no effect on the direction of AGF Management i.e., AGF Management and Cogeco Communications go up and down completely randomly.
Pair Corralation between AGF Management and Cogeco Communications
Assuming the 90 days trading horizon AGF Management Limited is expected to generate 1.78 times more return on investment than Cogeco Communications. However, AGF Management is 1.78 times more volatile than Cogeco Communications. It trades about 0.15 of its potential returns per unit of risk. Cogeco Communications is currently generating about -0.17 per unit of risk. If you would invest 1,053 in AGF Management Limited on August 28, 2024 and sell it today you would earn a total of 59.00 from holding AGF Management Limited or generate 5.6% 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. Cogeco Communications
Performance |
| Timeline |
| AGF Management |
| Cogeco Communications |
AGF Management and Cogeco Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Cogeco Communications
The main advantage of trading using opposite AGF Management and Cogeco Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Cogeco Communications 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 Cogeco Communications will offset losses from the drop in Cogeco Communications' long position.| AGF Management vs. NVIDIA CDR | AGF Management vs. Apple Inc CDR | AGF Management vs. Microsoft Corp CDR | AGF Management vs. Amazon CDR |
| Cogeco Communications vs. Alphabet Inc CDR | Cogeco Communications vs. Microsoft Corp CDR | Cogeco Communications vs. NVIDIA CDR | Cogeco Communications vs. Tesla Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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