Correlation Between Prime Dividend and AGF Management
Can any of the company-specific risk be diversified away by investing in both Prime Dividend 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 Prime Dividend and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Dividend Corp and AGF Management Limited, you can compare the effects of market volatilities on Prime Dividend 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 Prime Dividend with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Dividend and AGF Management.
Diversification Opportunities for Prime Dividend and AGF Management
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prime and AGF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Prime Dividend Corp and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Prime Dividend 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 Prime Dividend Corp 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 Prime Dividend i.e., Prime Dividend and AGF Management go up and down completely randomly.
Pair Corralation between Prime Dividend and AGF Management
Assuming the 90 days trading horizon Prime Dividend Corp is expected to generate 1.73 times more return on investment than AGF Management. However, Prime Dividend is 1.73 times more volatile than AGF Management Limited. It trades about 0.05 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.09 per unit of risk. If you would invest 612.00 in Prime Dividend Corp on September 12, 2024 and sell it today you would earn a total of 267.00 from holding Prime Dividend Corp or generate 43.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Dividend Corp vs. AGF Management Limited
Performance |
| Timeline |
| Prime Dividend Corp |
| AGF Management |
Prime Dividend and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Dividend and AGF Management
The main advantage of trading using opposite Prime Dividend and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Dividend 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.| Prime Dividend vs. Brompton Lifeco Split | Prime Dividend vs. North American Financial | Prime Dividend vs. Financial 15 Split |
| AGF Management vs. Brompton Lifeco Split | AGF Management vs. North American Financial | AGF Management vs. Prime Dividend Corp | AGF Management vs. Financial 15 Split |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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