Correlation Between AGF Management and Salesforce
Can any of the company-specific risk be diversified away by investing in both AGF Management and Salesforce 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 Salesforce 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 SalesforceCom CDR, you can compare the effects of market volatilities on AGF Management and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Salesforce.
Diversification Opportunities for AGF Management and Salesforce
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AGF and Salesforce is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalesforceCom CDR has no effect on the direction of AGF Management i.e., AGF Management and Salesforce go up and down completely randomly.
Pair Corralation between AGF Management and Salesforce
Assuming the 90 days trading horizon AGF Management is expected to generate 6.78 times less return on investment than Salesforce. But when comparing it to its historical volatility, AGF Management Limited is 1.42 times less risky than Salesforce. It trades about 0.07 of its potential returns per unit of risk. SalesforceCom CDR is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,341 in SalesforceCom CDR on August 27, 2024 and sell it today you would earn a total of 363.00 from holding SalesforceCom CDR or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. SalesforceCom CDR
Performance |
| Timeline |
| AGF Management |
| SalesforceCom CDR |
AGF Management and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Salesforce
The main advantage of trading using opposite AGF Management and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| AGF Management vs. NVIDIA CDR | AGF Management vs. Apple Inc CDR | AGF Management vs. Microsoft Corp CDR | AGF Management vs. Amazon CDR |
| Salesforce vs. Arizona Metals Corp | Salesforce vs. Advent Wireless | Salesforce vs. Maple Leaf Foods | Salesforce vs. Evertz Technologies Limited |
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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