Correlation Between Q Gold and AGF Management

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

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

Diversification Opportunities for Q Gold and AGF Management

-0.53

Correlation Coefficient

Q Gold  AGF Management

Excellent diversification

The 3 months correlation between QGR and AGF is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Q Gold Resources and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Q Gold 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 Q Gold Resources 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 Q Gold i.e., Q Gold and AGF Management go up and down completely randomly.

Pair Corralation between Q Gold and AGF Management

Assuming the 90 days horizon Q Gold Resources is expected to generate 8.58 times more return on investment than AGF Management. However, Q Gold is 8.58 times more volatile than AGF Management Limited. It trades about 0.12 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.09 per unit of risk. If you would invest  2.00  in Q Gold Resources on October 9, 2024 and sell it today you would earn a total of  12.00  from holding Q Gold Resources or generate 600.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Q Gold Resources  vs.  AGF Management Limited

Q Gold Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Q Gold Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Q Gold may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AGF Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AGF Management is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Q Gold and AGF Management

The main advantage of trading using opposite Q Gold and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q Gold 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 Q Gold Resources 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.