Correlation Between Mullen Automotive and AGF Management
Can any of the company-specific risk be diversified away by investing in both Mullen Automotive 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 Mullen Automotive and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mullen Automotive and AGF Management Limited, you can compare the effects of market volatilities on Mullen Automotive 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 Mullen Automotive with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mullen Automotive and AGF Management.
Diversification Opportunities for Mullen Automotive and AGF Management
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mullen and AGF is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mullen Automotive and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Mullen Automotive 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 Mullen Automotive 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 Mullen Automotive i.e., Mullen Automotive and AGF Management go up and down completely randomly.
Pair Corralation between Mullen Automotive and AGF Management
Given the investment horizon of 90 days Mullen Automotive is expected to under-perform the AGF Management. In addition to that, Mullen Automotive is 4.83 times more volatile than AGF Management Limited. It trades about -0.22 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.05 per unit of volatility. If you would invest 516.00 in AGF Management Limited on January 10, 2025 and sell it today you would earn a total of 151.00 from holding AGF Management Limited or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 66.99% |
| Values | Daily Returns |
Mullen Automotive vs. AGF Management Limited
Performance |
| Timeline |
| Mullen Automotive |
| AGF Management |
Mullen Automotive and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mullen Automotive and AGF Management
The main advantage of trading using opposite Mullen Automotive and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mullen Automotive 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.The idea behind Mullen Automotive and AGF Management Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AGF Management vs. Fiera Capital | AGF Management vs. Ameritrans Capital Corp | AGF Management vs. Bounce Mobile Systems | AGF Management vs. Elysee Development Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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