Correlation Between AGF Management and Rocky Mountain
Can any of the company-specific risk be diversified away by investing in both AGF Management and Rocky Mountain 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 Rocky Mountain 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 Rocky Mountain Liquor, you can compare the effects of market volatilities on AGF Management and Rocky Mountain 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 Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Rocky Mountain.
Diversification Opportunities for AGF Management and Rocky Mountain
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGF and Rocky is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Rocky Mountain Liquor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Liquor 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 Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Liquor has no effect on the direction of AGF Management i.e., AGF Management and Rocky Mountain go up and down completely randomly.
Pair Corralation between AGF Management and Rocky Mountain
Assuming the 90 days trading horizon AGF Management Limited is expected to generate 0.32 times more return on investment than Rocky Mountain. However, AGF Management Limited is 3.14 times less risky than Rocky Mountain. It trades about 0.08 of its potential returns per unit of risk. Rocky Mountain Liquor is currently generating about 0.01 per unit of risk. If you would invest 603.00 in AGF Management Limited on September 13, 2024 and sell it today you would earn a total of 516.00 from holding AGF Management Limited or generate 85.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGF Management Limited vs. Rocky Mountain Liquor
Performance |
| Timeline |
| AGF Management |
| Rocky Mountain Liquor |
AGF Management and Rocky Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Rocky Mountain
The main advantage of trading using opposite AGF Management and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain's long position.| AGF Management vs. Berkshire Hathaway CDR | AGF Management vs. E L Financial Corp | AGF Management vs. E L Financial 3 | AGF Management vs. Molson Coors Canada |
| Rocky Mountain vs. High Liner Foods | Rocky Mountain vs. Richelieu Hardware | Rocky Mountain vs. Toromont Industries | Rocky Mountain vs. iShares Canadian HYBrid |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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