Correlation Between AGF Management and Deutsche Bank

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

Diversification Opportunities for AGF Management and Deutsche Bank

0.43

Correlation Coefficient

AGF Management  Deutsche Bank

Very weak diversification

The 3 months correlation between AGF and Deutsche is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of AGF Management i.e., AGF Management and Deutsche Bank go up and down completely randomly.

Pair Corralation between AGF Management and Deutsche Bank

Assuming the 90 days horizon AGF Management Limited is expected to generate 1.21 times more return on investment than Deutsche Bank. However, AGF Management is 1.21 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.08 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.07 per unit of risk. If you would invest  659.00  in AGF Management Limited on October 8, 2024 and sell it today you would earn a total of  51.00  from holding AGF Management Limited or generate 7.74% return on investment over 90 days.

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

AGF Management Limited  vs.  Deutsche Bank Aktiengesellscha

AGF Management

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 6 (%) 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.

Deutsche Bank Aktien

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward-looking signals, Deutsche Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AGF Management and Deutsche Bank

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

The idea behind AGF Management Limited and Deutsche Bank Aktiengesellschaft 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.