Correlation Between Japan Medical and AGF Management
Can any of the company-specific risk be diversified away by investing in both Japan Medical 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 Medical 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 Medical Dynamic and AGF Management Limited, you can compare the effects of market volatilities on Japan Medical 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 Medical with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and AGF Management.
Diversification Opportunities for Japan Medical and AGF Management
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Japan and AGF is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic 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 Medical 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 Medical Dynamic 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 Medical i.e., Japan Medical and AGF Management go up and down completely randomly.
Pair Corralation between Japan Medical and AGF Management
Assuming the 90 days horizon Japan Medical is expected to generate 2.18 times less return on investment than AGF Management. But when comparing it to its historical volatility, Japan Medical Dynamic is 1.55 times less risky than AGF Management. It trades about 0.15 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 670.00 in AGF Management Limited on September 1, 2024 and sell it today you would earn a total of 65.00 from holding AGF Management Limited or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Medical Dynamic vs. AGF Management Limited
Performance |
| Timeline |
| Japan Medical Dynamic |
| AGF Management |
Japan Medical and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Medical and AGF Management
The main advantage of trading using opposite Japan Medical and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Medical 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 Medical vs. Stryker | Japan Medical vs. Superior Plus Corp | Japan Medical vs. NMI Holdings | Japan Medical vs. Origin Agritech |
| AGF Management vs. UNIVMUSIC GRPADR050 | AGF Management vs. PLAY2CHILL SA ZY | AGF Management vs. BOS BETTER ONLINE | AGF Management vs. COLUMBIA SPORTSWEAR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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