Correlation Between AGF Management and International Game

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Can any of the company-specific risk be diversified away by investing in both AGF Management and International Game 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 AGF Management and International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGF Management Limited and International Game Technology, you can compare the effects of market volatilities on AGF Management and International Game 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 AGF Management with a short position of International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and International Game.

Diversification Opportunities for AGF Management and International Game

AGFInternationalDiversified AwayAGFInternationalDiversified Away100%
0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between AGF and International is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and AGF Management 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 AGF Management Limited are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of AGF Management i.e., AGF Management and International Game go up and down completely randomly.

Pair Corralation between AGF Management and International Game

Assuming the 90 days horizon AGF Management Limited is expected to generate 0.78 times more return on investment than International Game. However, AGF Management Limited is 1.28 times less risky than International Game. It trades about 0.01 of its potential returns per unit of risk. International Game Technology is currently generating about -0.09 per unit of risk. If you would invest  708.00  in AGF Management Limited on November 18, 2024 and sell it today you would earn a total of  2.00  from holding AGF Management Limited or generate 0.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

AGF Management Limited  vs.  International Game Technology

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15A3J 7IG
       Timeline  
AGF Management 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days AGF Management Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AGF Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.76.86.977.17.27.37.47.5
International Game 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1616.51717.51818.519

AGF Management and International Game Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.2-1.66-1.12-0.58-0.04580.471.011.552.092.63 0.100.150.20
JavaScript chart by amCharts 3.21.15A3J 7IG
       Returns  

Pair Trading with AGF Management and International Game

The main advantage of trading using opposite AGF Management and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.
The idea behind AGF Management Limited and International Game Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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