Correlation Between AGF Management and Enbridge Pref

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

Diversification Opportunities for AGF Management and Enbridge Pref

-0.24

Correlation Coefficient

AGF Management  Enbridge Pref

Very good diversification

The 3 months correlation between AGF and Enbridge is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Enbridge Pref L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref L 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 Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref L has no effect on the direction of AGF Management i.e., AGF Management and Enbridge Pref go up and down completely randomly.

Pair Corralation between AGF Management and Enbridge Pref

Assuming the 90 days trading horizon AGF Management Limited is expected to generate 3.06 times more return on investment than Enbridge Pref. However, AGF Management is 3.06 times more volatile than Enbridge Pref L. It trades about 0.15 of its potential returns per unit of risk. Enbridge Pref L is currently generating about 0.22 per unit of risk. If you would invest  1,080  in AGF Management Limited on October 25, 2024 and sell it today you would earn a total of  50.00  from holding AGF Management Limited or generate 4.63% return on investment over 90 days.

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

AGF Management Limited  vs.  Enbridge Pref L

AGF Management

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, AGF Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Enbridge Pref L

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref L are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enbridge Pref is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AGF Management and Enbridge Pref

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

The idea behind AGF Management Limited and Enbridge Pref L 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.