Correlation Between JAPAN AIRLINES and AGF Management
Can any of the company-specific risk be diversified away by investing in both JAPAN AIRLINES 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 JAPAN AIRLINES and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN AIRLINES and AGF Management Limited, you can compare the effects of market volatilities on JAPAN AIRLINES 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 JAPAN AIRLINES with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN AIRLINES and AGF Management.
Diversification Opportunities for JAPAN AIRLINES and AGF Management
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JAPAN and AGF is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN AIRLINES and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and JAPAN AIRLINES 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 JAPAN AIRLINES 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 JAPAN AIRLINES i.e., JAPAN AIRLINES and AGF Management go up and down completely randomly.
Pair Corralation between JAPAN AIRLINES and AGF Management
Assuming the 90 days trading horizon JAPAN AIRLINES is expected to under-perform the AGF Management. But the stock apears to be less risky and, when comparing its historical volatility, JAPAN AIRLINES is 1.02 times less risky than AGF Management. The stock trades about -0.33 of its potential returns per unit of risk. The AGF Management Limited is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 693.00 in AGF Management Limited on October 19, 2024 and sell it today you would lose (28.00) from holding AGF Management Limited or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JAPAN AIRLINES vs. AGF Management Limited
Performance |
| Timeline |
| JAPAN AIRLINES |
| AGF Management |
JAPAN AIRLINES and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN AIRLINES and AGF Management
The main advantage of trading using opposite JAPAN AIRLINES and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN AIRLINES 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.| JAPAN AIRLINES vs. Burlington Stores | JAPAN AIRLINES vs. JIAHUA STORES | JAPAN AIRLINES vs. ON SEMICONDUCTOR | JAPAN AIRLINES vs. Costco Wholesale Corp |
| AGF Management vs. JAPAN AIRLINES | AGF Management vs. LOANDEPOT INC A | AGF Management vs. China Eastern Airlines | AGF Management vs. Jacquet Metal Service |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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