Correlation Between IA Financial and AGF Management
Can any of the company-specific risk be diversified away by investing in both IA Financial 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 IA Financial and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and AGF Management Limited, you can compare the effects of market volatilities on IA Financial 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 IA Financial with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and AGF Management.
Diversification Opportunities for IA Financial and AGF Management
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IAG and AGF is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and IA Financial 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 iA Financial 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 IA Financial i.e., IA Financial and AGF Management go up and down completely randomly.
Pair Corralation between IA Financial and AGF Management
Assuming the 90 days trading horizon iA Financial is expected to generate 1.01 times more return on investment than AGF Management. However, IA Financial is 1.01 times more volatile than AGF Management Limited. It trades about 0.08 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.07 per unit of risk. If you would invest 9,855 in iA Financial on January 14, 2025 and sell it today you would earn a total of 2,570 from holding iA Financial or generate 26.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iA Financial vs. AGF Management Limited
Performance |
| Timeline |
| iA Financial |
| AGF Management |
IA Financial and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Financial and AGF Management
The main advantage of trading using opposite IA Financial and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial 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.| IA Financial vs. Great West Lifeco | IA Financial vs. Intact Financial | IA Financial vs. IGM Financial | IA Financial vs. Sun Life Financial |
| AGF Management vs. IGM Financial | AGF Management vs. CI Financial Corp | AGF Management vs. iA Financial | AGF Management vs. Transcontinental |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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