Correlation Between AGF Management and Yara International
Can any of the company-specific risk be diversified away by investing in both AGF Management and Yara International 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 Yara International 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 Yara International ASA, you can compare the effects of market volatilities on AGF Management and Yara International 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 Yara International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Yara International.
Diversification Opportunities for AGF Management and Yara International
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGF and Yara is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Yara International ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yara International ASA 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 Yara International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yara International ASA has no effect on the direction of AGF Management i.e., AGF Management and Yara International go up and down completely randomly.
Pair Corralation between AGF Management and Yara International
Assuming the 90 days horizon AGF Management Limited is expected to generate 1.27 times more return on investment than Yara International. However, AGF Management is 1.27 times more volatile than Yara International ASA. It trades about 0.15 of its potential returns per unit of risk. Yara International ASA is currently generating about 0.05 per unit of risk. If you would invest 508.00 in AGF Management Limited on December 5, 2024 and sell it today you would earn a total of 217.00 from holding AGF Management Limited or generate 42.72% 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. Yara International ASA
Performance |
Timeline |
AGF Management |
Yara International ASA |
AGF Management and Yara International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AGF Management and Yara International
The main advantage of trading using opposite AGF Management and Yara International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, Yara International 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 Yara International will offset losses from the drop in Yara International's long position.AGF Management vs. United Overseas Insurance | AGF Management vs. SIEM OFFSHORE NEW | AGF Management vs. BANKINTER ADR 2007 | AGF Management vs. CREDIT AGRICOLE |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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