Correlation Between Highwood Asset and AGF Management
Can any of the company-specific risk be diversified away by investing in both Highwood Asset 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 Highwood Asset and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwood Asset Management and AGF Management Limited, you can compare the effects of market volatilities on Highwood Asset 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 Highwood Asset with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and AGF Management.
Diversification Opportunities for Highwood Asset and AGF Management
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highwood and AGF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset 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 Highwood Asset 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 Highwood Asset 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 Highwood Asset i.e., Highwood Asset and AGF Management go up and down completely randomly.
Pair Corralation between Highwood Asset and AGF Management
Assuming the 90 days horizon Highwood Asset Management is expected to under-perform the AGF Management. But the stock apears to be less risky and, when comparing its historical volatility, Highwood Asset Management is 1.21 times less risky than AGF Management. The stock trades about -0.11 of its potential returns per unit of risk. The AGF Management Limited is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,045 in AGF Management Limited on November 5, 2024 and sell it today you would earn a total of 83.00 from holding AGF Management Limited or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwood Asset Management vs. AGF Management Limited
Performance |
| Timeline |
| Highwood Asset Management |
| AGF Management |
Highwood Asset and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwood Asset and AGF Management
The main advantage of trading using opposite Highwood Asset and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset 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.| Highwood Asset vs. Constellation Software | Highwood Asset vs. Fairfax Financial Holdings | Highwood Asset vs. FirstService Corp | Highwood Asset vs. Intact Financial |
| AGF Management vs. NovaGold Resources | AGF Management vs. HPQ Silicon Resources | AGF Management vs. Eastwood Bio Medical Canada | AGF Management vs. Diamond Fields Resources |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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