Correlation Between AGF Management and DRI Healthcare
Can any of the company-specific risk be diversified away by investing in both AGF Management and DRI Healthcare 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 DRI Healthcare 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 DRI Healthcare Trust, you can compare the effects of market volatilities on AGF Management and DRI Healthcare 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 DRI Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and DRI Healthcare.
Diversification Opportunities for AGF Management and DRI Healthcare
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AGF and DRI is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and DRI Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRI Healthcare Trust 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 DRI Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRI Healthcare Trust has no effect on the direction of AGF Management i.e., AGF Management and DRI Healthcare go up and down completely randomly.
Pair Corralation between AGF Management and DRI Healthcare
Assuming the 90 days trading horizon AGF Management Limited is expected to generate 0.74 times more return on investment than DRI Healthcare. However, AGF Management Limited is 1.35 times less risky than DRI Healthcare. It trades about 0.21 of its potential returns per unit of risk. DRI Healthcare Trust is currently generating about 0.11 per unit of risk. If you would invest 1,065 in AGF Management Limited on October 26, 2024 and sell it today you would earn a total of 65.00 from holding AGF Management Limited or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. DRI Healthcare Trust
Performance |
| Timeline |
| AGF Management |
| DRI Healthcare Trust |
AGF Management and DRI Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and DRI Healthcare
The main advantage of trading using opposite AGF Management and DRI Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, DRI Healthcare 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 DRI Healthcare will offset losses from the drop in DRI Healthcare's long position.| AGF Management vs. IGM Financial | AGF Management vs. CI Financial Corp | AGF Management vs. iA Financial | AGF Management vs. Transcontinental |
| DRI Healthcare vs. DRI Healthcare Trust | DRI Healthcare vs. Dexterra Group | DRI Healthcare vs. European Residential Real | DRI Healthcare vs. Dream Residential Real |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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