Correlation Between Dynamic Global and AGF American

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

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

Diversification Opportunities for Dynamic Global and AGF American

0.42

Correlation Coefficient

Dynamic Global  AGF American

Very weak diversification

The 3 months correlation between Dynamic and AGF is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Global Fixed and AGF American Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF American Growth and Dynamic Global 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 Dynamic Global Fixed are associated (or correlated) with AGF American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF American Growth has no effect on the direction of Dynamic Global i.e., Dynamic Global and AGF American go up and down completely randomly.

Pair Corralation between Dynamic Global and AGF American

Assuming the 90 days trading horizon Dynamic Global Fixed is expected to under-perform the AGF American. But the fund apears to be less risky and, when comparing its historical volatility, Dynamic Global Fixed is 8.13 times less risky than AGF American. The fund trades about -0.16 of its potential returns per unit of risk. The AGF American Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7,274  in AGF American Growth on October 10, 2024 and sell it today you would earn a total of  45.00  from holding AGF American Growth or generate 0.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Dynamic Global Fixed  vs.  AGF American Growth

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.

AGF American Growth

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGF American Growth are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat sluggish basic indicators, AGF American may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dynamic Global and AGF American

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

The idea behind Dynamic Global Fixed and AGF American Growth 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.