Correlation Between ETFS Coffee and AGF Management
Can any of the company-specific risk be diversified away by investing in both ETFS Coffee 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 ETFS Coffee and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFS Coffee ETC and AGF Management Limited, you can compare the effects of market volatilities on ETFS Coffee 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 ETFS Coffee with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFS Coffee and AGF Management.
Diversification Opportunities for ETFS Coffee and AGF Management
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ETFS and AGF is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ETFS Coffee ETC and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and ETFS Coffee 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 ETFS Coffee ETC 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 ETFS Coffee i.e., ETFS Coffee and AGF Management go up and down completely randomly.
Pair Corralation between ETFS Coffee and AGF Management
Assuming the 90 days trading horizon ETFS Coffee ETC is expected to generate 1.54 times more return on investment than AGF Management. However, ETFS Coffee is 1.54 times more volatile than AGF Management Limited. It trades about 0.03 of its potential returns per unit of risk. AGF Management Limited is currently generating about -0.2 per unit of risk. If you would invest 5,355 in ETFS Coffee ETC on October 19, 2024 and sell it today you would earn a total of 26.00 from holding ETFS Coffee ETC or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
ETFS Coffee ETC vs. AGF Management Limited
Performance |
| Timeline |
| ETFS Coffee ETC |
| AGF Management |
ETFS Coffee and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFS Coffee and AGF Management
The main advantage of trading using opposite ETFS Coffee and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFS Coffee 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.| ETFS Coffee vs. CANON MARKETING JP | ETFS Coffee vs. Entravision Communications | ETFS Coffee vs. H2O Retailing | ETFS Coffee vs. TRADEDOUBLER AB SK |
| AGF Management vs. ITALIAN WINE BRANDS | AGF Management vs. ETFS Coffee ETC | AGF Management vs. VIVA WINE GROUP | AGF Management vs. SIEM OFFSHORE NEW |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |