Correlation Between AGF Management and FORTEC ELEKTRONIK

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

Diversification Opportunities for AGF Management and FORTEC ELEKTRONIK

0.03

Correlation Coefficient

AGF Management  FORTEC ELEKTRONIK

Significant diversification

The 3 months correlation between AGF and FORTEC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and FORTEC ELEKTRONIK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTEC ELEKTRONIK 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 FORTEC ELEKTRONIK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTEC ELEKTRONIK has no effect on the direction of AGF Management i.e., AGF Management and FORTEC ELEKTRONIK go up and down completely randomly.

Pair Corralation between AGF Management and FORTEC ELEKTRONIK

Assuming the 90 days horizon AGF Management Limited is expected to generate 0.72 times more return on investment than FORTEC ELEKTRONIK. However, AGF Management Limited is 1.38 times less risky than FORTEC ELEKTRONIK. It trades about -0.07 of its potential returns per unit of risk. FORTEC ELEKTRONIK is currently generating about -0.06 per unit of risk. If you would invest  679.00  in AGF Management Limited on December 20, 2024 and sell it today you would lose (64.00) from holding AGF Management Limited or give up 9.43% of portfolio value over 90 days.

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

AGF Management Limited  vs.  FORTEC ELEKTRONIK

AGF Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGF Management Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile 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.

FORTEC ELEKTRONIK

Risk-Adjusted Performance

Very Weak

Over the last 90 days FORTEC ELEKTRONIK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AGF Management and FORTEC ELEKTRONIK

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

The idea behind AGF Management Limited and FORTEC ELEKTRONIK 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.