Correlation Between Platinum Investment and AGF Management
Can any of the company-specific risk be diversified away by investing in both Platinum Investment 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 Platinum Investment and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and AGF Management Limited, you can compare the effects of market volatilities on Platinum Investment 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 Platinum Investment with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and AGF Management.
Diversification Opportunities for Platinum Investment and AGF Management
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Platinum and AGF is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Platinum Investment 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 Platinum Investment Management 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 Platinum Investment i.e., Platinum Investment and AGF Management go up and down completely randomly.
Pair Corralation between Platinum Investment and AGF Management
Assuming the 90 days horizon Platinum Investment Management is expected to under-perform the AGF Management. But the stock apears to be less risky and, when comparing its historical volatility, Platinum Investment Management is 1.48 times less risky than AGF Management. The stock trades about -0.42 of its potential returns per unit of risk. The AGF Management Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 675.00 in AGF Management Limited on August 31, 2024 and sell it today you would earn a total of 60.00 from holding AGF Management Limited or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. AGF Management Limited
Performance |
| Timeline |
| Platinum Investment |
| AGF Management |
Platinum Investment and AGF Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and AGF Management
The main advantage of trading using opposite Platinum Investment and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment 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.| Platinum Investment vs. PSI Software AG | Platinum Investment vs. China BlueChemical | Platinum Investment vs. UPDATE SOFTWARE | Platinum Investment vs. VITEC SOFTWARE GROUP |
| AGF Management vs. AXWAY SOFTWARE EO | AGF Management vs. Kaiser Aluminum | AGF Management vs. Jacquet Metal Service | AGF Management vs. Aluminum of |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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