Correlation Between AGF Management and Northview Residential

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

Diversification Opportunities for AGF Management and Northview Residential

0.0

Correlation Coefficient

AGF Management  Northview Residential

Pay attention - limited upside

The 3 months correlation between AGF and Northview is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Northview Residential REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northview Residential 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 Northview Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northview Residential has no effect on the direction of AGF Management i.e., AGF Management and Northview Residential go up and down completely randomly.

Pair Corralation between AGF Management and Northview Residential

Assuming the 90 days trading horizon AGF Management Limited is expected to generate 1.18 times more return on investment than Northview Residential. However, AGF Management is 1.18 times more volatile than Northview Residential REIT. It trades about 0.09 of its potential returns per unit of risk. Northview Residential REIT is currently generating about -0.05 per unit of risk. If you would invest  1,066  in AGF Management Limited on October 24, 2024 and sell it today you would earn a total of  26.00  from holding AGF Management Limited or generate 2.44% return on investment over 90 days.

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

AGF Management Limited  vs.  Northview Residential REIT

AGF Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 5 (%) 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.

Northview Residential

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northview Residential REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AGF Management and Northview Residential

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

The idea behind AGF Management Limited and Northview Residential REIT 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.