Correlation Between AGF American and Mawer Global

Can any of the company-specific risk be diversified away by investing in both AGF American and Mawer Global 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 American and Mawer Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGF American Growth and Mawer Global Small, you can compare the effects of market volatilities on AGF American and Mawer Global 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 American with a short position of Mawer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF American and Mawer Global.

Diversification Opportunities for AGF American and Mawer Global

-0.08

Correlation Coefficient

AGF American  Mawer Global

Good diversification

The 3 months correlation between AGF and Mawer is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding AGF American Growth and Mawer Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Global Small and AGF American 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 American Growth are associated (or correlated) with Mawer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Global Small has no effect on the direction of AGF American i.e., AGF American and Mawer Global go up and down completely randomly.

Pair Corralation between AGF American and Mawer Global

Assuming the 90 days trading horizon AGF American Growth is expected to generate 1.48 times more return on investment than Mawer Global. However, AGF American is 1.48 times more volatile than Mawer Global Small. It trades about 0.14 of its potential returns per unit of risk. Mawer Global Small is currently generating about -0.11 per unit of risk. If you would invest  6,716  in AGF American Growth on October 11, 2024 and sell it today you would earn a total of  603.00  from holding AGF American Growth or generate 8.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

AGF American Growth  vs.  Mawer Global Small

AGF American Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGF American Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, AGF American may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mawer Global Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mawer Global Small has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Mawer Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AGF American and Mawer Global

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

The idea behind AGF American Growth and Mawer Global Small 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.