Correlation Between AGF Investments and Global X

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

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

Diversification Opportunities for AGF Investments and Global X

-0.64

Correlation Coefficient

AGF Investments  Global X

Excellent diversification

The 3 months correlation between AGF and Global is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AGF Investments and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure and AGF Investments 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 Investments are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of AGF Investments i.e., AGF Investments and Global X go up and down completely randomly.

Pair Corralation between AGF Investments and Global X

Given the investment horizon of 90 days AGF Investments is expected to generate 8.75 times less return on investment than Global X. But when comparing it to its historical volatility, AGF Investments is 1.53 times less risky than Global X. It trades about 0.01 of its potential returns per unit of risk. Global X Infrastructure is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,736  in Global X Infrastructure on October 9, 2024 and sell it today you would earn a total of  1,358  from holding Global X Infrastructure or generate 49.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	26.21%
Values	Daily Returns

AGF Investments  vs.  Global X Infrastructure

AGF Investments

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global X Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Global X is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AGF Investments and Global X

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

The idea behind AGF Investments and Global X Infrastructure 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.