Correlation Between CPU SOFTWAREHOUSE and AGF Management
Can any of the company-specific risk be diversified away by investing in both CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPU SOFTWAREHOUSE and AGF Management Limited, you can compare the effects of market volatilities on CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPU SOFTWAREHOUSE and AGF Management.
Diversification Opportunities for CPU SOFTWAREHOUSE and AGF Management
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CPU and AGF is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CPU SOFTWAREHOUSE and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE i.e., CPU SOFTWAREHOUSE and AGF Management go up and down completely randomly.
Pair Corralation between CPU SOFTWAREHOUSE and AGF Management
Assuming the 90 days trading horizon CPU SOFTWAREHOUSE is expected to generate 1.3 times less return on investment than AGF Management. In addition to that, CPU SOFTWAREHOUSE is 1.16 times more volatile than AGF Management Limited. It trades about 0.11 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.17 per unit of volatility. If you would invest 675.00 in AGF Management Limited on August 29, 2024 and sell it today you would earn a total of 50.00 from holding AGF Management Limited or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPU SOFTWAREHOUSE vs. AGF Management Limited
Performance |
| Timeline |
| CPU SOFTWAREHOUSE |
| AGF Management |
CPU SOFTWAREHOUSE and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPU SOFTWAREHOUSE and AGF Management
The main advantage of trading using opposite CPU SOFTWAREHOUSE and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPU SOFTWAREHOUSE 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.| CPU SOFTWAREHOUSE vs. Apple Inc | CPU SOFTWAREHOUSE vs. Apple Inc | CPU SOFTWAREHOUSE vs. Microsoft | CPU SOFTWAREHOUSE vs. Microsoft |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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