Correlation Between AGF Management and Walmart
Can any of the company-specific risk be diversified away by investing in both AGF Management and Walmart 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 Walmart 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 Walmart Inc CDR, you can compare the effects of market volatilities on AGF Management and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Walmart.
Diversification Opportunities for AGF Management and Walmart
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGF and Walmart is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Walmart Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walmart Inc 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 Walmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walmart Inc CDR has no effect on the direction of AGF Management i.e., AGF Management and Walmart go up and down completely randomly.
Pair Corralation between AGF Management and Walmart
Assuming the 90 days trading horizon AGF Management is expected to generate 2.07 times less return on investment than Walmart. In addition to that, AGF Management is 1.41 times more volatile than Walmart Inc CDR. It trades about 0.12 of its total potential returns per unit of risk. Walmart Inc CDR is currently generating about 0.36 per unit of volatility. If you would invest 3,617 in Walmart Inc CDR on August 25, 2024 and sell it today you would earn a total of 318.00 from holding Walmart Inc CDR or generate 8.79% 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. Walmart Inc CDR
Performance |
| Timeline |
| AGF Management |
| Walmart Inc CDR |
AGF Management and Walmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGF Management and Walmart
The main advantage of trading using opposite AGF Management and Walmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Walmart 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 Walmart will offset losses from the drop in Walmart's long position.| AGF Management vs. Walmart Inc CDR | AGF Management vs. Amazon CDR | AGF Management vs. UPS CDR | AGF Management vs. HOME DEPOT CDR |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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