Correlation Between Granite Construction and AGF Management
Can any of the company-specific risk be diversified away by investing in both Granite Construction 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 Granite Construction and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and AGF Management Limited, you can compare the effects of market volatilities on Granite Construction 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 Granite Construction with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and AGF Management.
Diversification Opportunities for Granite Construction and AGF Management
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Granite and AGF is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Granite Construction 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 Granite Construction 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 Granite Construction i.e., Granite Construction and AGF Management go up and down completely randomly.
Pair Corralation between Granite Construction and AGF Management
Assuming the 90 days trading horizon Granite Construction is expected to generate 1.01 times more return on investment than AGF Management. However, Granite Construction is 1.01 times more volatile than AGF Management Limited. It trades about 0.11 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.06 per unit of risk. If you would invest 3,194 in Granite Construction on September 26, 2024 and sell it today you would earn a total of 5,406 from holding Granite Construction or generate 169.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. AGF Management Limited
Performance |
| Timeline |
| Granite Construction |
| AGF Management |
Granite Construction and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and AGF Management
The main advantage of trading using opposite Granite Construction and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction 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.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| AGF Management vs. Blackstone Group | AGF Management vs. The Bank of | AGF Management vs. Ameriprise Financial | AGF Management vs. State Street |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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