Correlation Between AGF Management and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both AGF Management and Lomiko Metals 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 Lomiko Metals 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 Lomiko Metals, you can compare the effects of market volatilities on AGF Management and Lomiko Metals 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 Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Lomiko Metals.
Diversification Opportunities for AGF Management and Lomiko Metals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and Lomiko is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko Metals 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 Lomiko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lomiko Metals has no effect on the direction of AGF Management i.e., AGF Management and Lomiko Metals go up and down completely randomly.
Pair Corralation between AGF Management and Lomiko Metals
Assuming the 90 days trading horizon AGF Management is expected to generate 6.57 times less return on investment than Lomiko Metals. But when comparing it to its historical volatility, AGF Management Limited is 4.59 times less risky than Lomiko Metals. It trades about 0.12 of its potential returns per unit of risk. Lomiko Metals is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Lomiko Metals on December 1, 2024 and sell it today you would earn a total of 4.00 from holding Lomiko Metals or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Lomiko Metals
Performance |
| Timeline |
| AGF Management |
| Lomiko Metals |
AGF Management and Lomiko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Lomiko Metals
The main advantage of trading using opposite AGF Management and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Lomiko Metals 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 Lomiko Metals will offset losses from the drop in Lomiko Metals' long position.| AGF Management vs. IGM Financial | AGF Management vs. CI Financial Corp | AGF Management vs. iA Financial | AGF Management vs. Transcontinental |
| Lomiko Metals vs. Profound Medical Corp | Lomiko Metals vs. Advent Wireless | Lomiko Metals vs. Verizon Communications CDR | Lomiko Metals vs. Canso Credit Trust |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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