Correlation Between AGF Management and WIZZ AIR

Can any of the company-specific risk be diversified away by investing in both AGF Management and WIZZ AIR 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 WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4, you can compare the effects of market volatilities on AGF Management and WIZZ AIR 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 WIZZ AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and WIZZ AIR.

Diversification Opportunities for AGF Management and WIZZ AIR

0.06

Correlation Coefficient

AGF Management  WIZZ AIR

Significant diversification

The 3 months correlation between AGF and WIZZ is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and WIZZ AIR HLDGUNSPADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIZZ AIR HLDGUNSPADR4 has no effect on the direction of AGF Management i.e., AGF Management and WIZZ AIR go up and down completely randomly.

Pair Corralation between AGF Management and WIZZ AIR

Assuming the 90 days horizon AGF Management Limited is expected to under-perform the WIZZ AIR. But the stock apears to be less risky and, when comparing its historical volatility, AGF Management Limited is 4.94 times less risky than WIZZ AIR. The stock trades about -0.13 of its potential returns per unit of risk. The WIZZ AIR HLDGUNSPADR4 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  380.00  in WIZZ AIR HLDGUNSPADR4 on September 25, 2024 and sell it today you would earn a total of  44.00  from holding WIZZ AIR HLDGUNSPADR4 or generate 11.58% return on investment over 90 days.

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

AGF Management Limited  vs.  WIZZ AIR HLDGUNSPADR4

AGF Management

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGF Management reported solid returns over the last few months and may actually be approaching a breakup point.

WIZZ AIR HLDGUNSPADR4

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WIZZ AIR HLDGUNSPADR4 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WIZZ AIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGF Management and WIZZ AIR

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

The idea behind AGF Management Limited and WIZZ AIR HLDGUNSPADR4 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.