Correlation Between Air Products and AGF Management
Can any of the company-specific risk be diversified away by investing in both Air Products and AGF Management 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 Air Products and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and AGF Management Limited, you can compare the effects of market volatilities on Air Products and AGF Management 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 Air Products with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and AGF Management.
Diversification Opportunities for Air Products and AGF Management
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and AGF is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Air Products 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 Air Products and are associated (or correlated) with AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Air Products i.e., Air Products and AGF Management go up and down completely randomly.
Pair Corralation between Air Products and AGF Management
Assuming the 90 days horizon Air Products and is expected to generate 1.8 times more return on investment than AGF Management. However, Air Products is 1.8 times more volatile than AGF Management Limited. It trades about 0.05 of its potential returns per unit of risk. AGF Management Limited is currently generating about -0.09 per unit of risk. If you would invest 29,350 in Air Products and on September 13, 2024 and sell it today you would earn a total of 510.00 from holding Air Products and or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. AGF Management Limited
Performance |
| Timeline |
| Air Products |
| AGF Management |
Air Products and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and AGF Management
The main advantage of trading using opposite Air Products and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, AGF Management 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 AGF Management will offset losses from the drop in AGF Management's long position.| Air Products vs. AGF Management Limited | Air Products vs. Gamma Communications plc | Air Products vs. Computershare Limited | Air Products vs. COMPUTERSHARE |
| AGF Management vs. Ameriprise Financial | AGF Management vs. Ares Management Corp | AGF Management vs. Superior Plus Corp | AGF Management vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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