Correlation Between AGF Management and BlackRock Municipal

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

Diversification Opportunities for AGF Management and BlackRock Municipal

-0.02

Correlation Coefficient

AGF Management  BlackRock Municipal

Good diversification

The 3 months correlation between AGF and BlackRock is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and BlackRock Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Municipal 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 BlackRock Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Municipal has no effect on the direction of AGF Management i.e., AGF Management and BlackRock Municipal go up and down completely randomly.

Pair Corralation between AGF Management and BlackRock Municipal

Assuming the 90 days horizon AGF Management Limited is expected to under-perform the BlackRock Municipal. In addition to that, AGF Management is 2.18 times more volatile than BlackRock Municipal Income. It trades about -0.22 of its total potential returns per unit of risk. BlackRock Municipal Income is currently generating about -0.4 per unit of volatility. If you would invest  1,039  in BlackRock Municipal Income on October 4, 2024 and sell it today you would lose (46.99) from holding BlackRock Municipal Income or give up 4.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

AGF Management Limited  vs.  BlackRock Municipal Income

AGF Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGF Management Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, AGF Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BlackRock Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Municipal Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, BlackRock Municipal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with AGF Management and BlackRock Municipal

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

The idea behind AGF Management Limited and BlackRock Municipal Income 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..