Correlation Between AGF Management and Dave Busters

Can any of the company-specific risk be diversified away by investing in both AGF Management and Dave Busters 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 Dave Busters 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 Dave Busters Entertainment, you can compare the effects of market volatilities on AGF Management and Dave Busters 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 Dave Busters. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Dave Busters.

Diversification Opportunities for AGF Management and Dave Busters

0.3

Correlation Coefficient

AGF Management  Dave Busters

Weak diversification

The 3 months correlation between AGF and Dave is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Dave Busters Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dave Busters Enterta 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 Dave Busters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dave Busters Enterta has no effect on the direction of AGF Management i.e., AGF Management and Dave Busters go up and down completely randomly.

Pair Corralation between AGF Management and Dave Busters

Assuming the 90 days horizon AGF Management Limited is expected to generate 0.66 times more return on investment than Dave Busters. However, AGF Management Limited is 1.51 times less risky than Dave Busters. It trades about 0.06 of its potential returns per unit of risk. Dave Busters Entertainment is currently generating about 0.0 per unit of risk. If you would invest  445.00  in AGF Management Limited on October 11, 2024 and sell it today you would earn a total of  260.00  from holding AGF Management Limited or generate 58.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AGF Management Limited  vs.  Dave Busters Entertainment

AGF Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Dave Busters Enterta

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dave Busters Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Dave Busters is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AGF Management and Dave Busters

The main advantage of trading using opposite AGF Management and Dave Busters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Dave Busters 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 Dave Busters will offset losses from the drop in Dave Busters' long position.

The idea behind AGF Management Limited and Dave Busters Entertainment 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.

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.