Correlation Between Neptune Digital and AGF Management
Can any of the company-specific risk be diversified away by investing in both Neptune Digital 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 Neptune Digital and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neptune Digital Assets and AGF Management Limited, you can compare the effects of market volatilities on Neptune Digital 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 Neptune Digital with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neptune Digital and AGF Management.
Diversification Opportunities for Neptune Digital and AGF Management
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neptune and AGF is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Neptune Digital Assets and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Neptune Digital 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 Neptune Digital Assets 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 Neptune Digital i.e., Neptune Digital and AGF Management go up and down completely randomly.
Pair Corralation between Neptune Digital and AGF Management
Assuming the 90 days horizon Neptune Digital Assets is expected to under-perform the AGF Management. In addition to that, Neptune Digital is 5.75 times more volatile than AGF Management Limited. It trades about -0.05 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.19 per unit of volatility. If you would invest 1,042 in AGF Management Limited on September 1, 2024 and sell it today you would earn a total of 78.00 from holding AGF Management Limited or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neptune Digital Assets vs. AGF Management Limited
Performance |
| Timeline |
| Neptune Digital Assets |
| AGF Management |
Neptune Digital and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neptune Digital and AGF Management
The main advantage of trading using opposite Neptune Digital and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neptune Digital 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.| Neptune Digital vs. AGF Management Limited | Neptune Digital vs. Upstart Investments | Neptune Digital vs. Bip Investment Corp | Neptune Digital vs. Westshore Terminals Investment |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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