Correlation Between AGF American and Dynamic Global

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

Diversification Opportunities for AGF American and Dynamic Global

0.4

Correlation Coefficient

AGF American  Dynamic Global

Very weak diversification

The 3 months correlation between AGF and Dynamic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AGF American Growth and Dynamic Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Global Fixed 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 Dynamic Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Global Fixed has no effect on the direction of AGF American i.e., AGF American and Dynamic Global go up and down completely randomly.

Pair Corralation between AGF American and Dynamic Global

Assuming the 90 days trading horizon AGF American Growth is expected to generate 2.84 times more return on investment than Dynamic Global. However, AGF American is 2.84 times more volatile than Dynamic Global Fixed. It trades about 0.12 of its potential returns per unit of risk. Dynamic Global Fixed is currently generating about 0.02 per unit of risk. If you would invest  4,364  in AGF American Growth on October 11, 2024 and sell it today you would earn a total of  2,955  from holding AGF American Growth or generate 67.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	7.27%
Values	Daily Returns

AGF American Growth  vs.  Dynamic Global Fixed

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.

Dynamic Global Fixed

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Global Fixed are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Dynamic Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with AGF American and Dynamic Global

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

The idea behind AGF American Growth and Dynamic Global Fixed 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.