Correlation Between AECOM TECHNOLOGY and AGF Management

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

By analyzing existing cross correlation between AECOM TECHNOLOGY and AGF Management Limited, you can compare the effects of market volatilities on AECOM TECHNOLOGY and AGF Management 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 AECOM TECHNOLOGY with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and AGF Management.

Diversification Opportunities for AECOM TECHNOLOGY and AGF Management

0.81

Correlation Coefficient

AECOM TECHNOLOGY  AGF Management

Very poor diversification

The 3 months correlation between AECOM and AGF is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY are associated (or correlated) with AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and AGF Management go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and AGF Management

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the AGF Management. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 1.24 times less risky than AGF Management. The stock trades about -0.21 of its potential returns per unit of risk. The AGF Management Limited is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  730.00  in AGF Management Limited on October 9, 2024 and sell it today you would lose (20.00) from holding AGF Management Limited or give up 2.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

AECOM TECHNOLOGY  vs.  AGF Management Limited

AECOM TECHNOLOGY

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AECOM TECHNOLOGY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AECOM TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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. Despite nearly fragile basic indicators, AGF Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with AECOM TECHNOLOGY and AGF Management

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

The idea behind AECOM TECHNOLOGY and AGF Management Limited 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 CEOs Directory module to screen CEOs from public companies around the world.