Correlation Between Dollar General and AGF Management

Can any of the company-specific risk be diversified away by investing in both Dollar General 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 Dollar General and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dollar General and AGF Management Limited, you can compare the effects of market volatilities on Dollar General 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 Dollar General with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and AGF Management.

Diversification Opportunities for Dollar General and AGF Management

-0.12

Correlation Coefficient

Dollar General  AGF Management

Good diversification

The 3 months correlation between Dollar and AGF is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Dollar General 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 Dollar General 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 Dollar General i.e., Dollar General and AGF Management go up and down completely randomly.

Pair Corralation between Dollar General and AGF Management

If you would invest  445.00  in AGF Management Limited on October 10, 2024 and sell it today you would earn a total of  265.00  from holding AGF Management Limited or generate 59.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Dollar General  vs.  AGF Management Limited

Dollar General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dollar General has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dollar General is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AGF Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGF Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dollar General and AGF Management

The main advantage of trading using opposite Dollar General and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General 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 Dollar General 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.