Correlation Between Coor Service and AGF Management
Can any of the company-specific risk be diversified away by investing in both Coor Service 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 Coor Service and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coor Service Management and AGF Management Limited, you can compare the effects of market volatilities on Coor Service 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 Coor Service with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and AGF Management.
Diversification Opportunities for Coor Service and AGF Management
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coor and AGF is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Coor Service 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 Coor Service Management 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 Coor Service i.e., Coor Service and AGF Management go up and down completely randomly.
Pair Corralation between Coor Service and AGF Management
Assuming the 90 days horizon Coor Service Management is expected to under-perform the AGF Management. In addition to that, Coor Service is 1.38 times more volatile than AGF Management Limited. It trades about -0.02 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.26 per unit of volatility. If you would invest 516.00 in AGF Management Limited on August 28, 2024 and sell it today you would earn a total of 209.00 from holding AGF Management Limited or generate 40.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coor Service Management vs. AGF Management Limited
Performance |
| Timeline |
| Coor Service Management |
| AGF Management |
Coor Service and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coor Service and AGF Management
The main advantage of trading using opposite Coor Service and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service 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.The idea behind Coor Service Management and AGF Management Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AGF Management vs. Diamondrock Hospitality Co | AGF Management vs. Ramsay Health Care | AGF Management vs. THRACE PLASTICS | AGF Management vs. DiamondRock Hospitality |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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