Correlation Between Q2 Metals and AGF Management

Can any of the company-specific risk be diversified away by investing in both Q2 Metals 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 Q2 Metals and AGF Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2 Metals Corp and AGF Management Limited, you can compare the effects of market volatilities on Q2 Metals 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 Q2 Metals with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2 Metals and AGF Management.

Diversification Opportunities for Q2 Metals and AGF Management

0.06

Correlation Coefficient

Q2 Metals  AGF Management

Significant diversification

The 3 months correlation between QTWO and AGF is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Q2 Metals Corp and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Q2 Metals 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 Q2 Metals Corp 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 Q2 Metals i.e., Q2 Metals and AGF Management go up and down completely randomly.

Pair Corralation between Q2 Metals and AGF Management

Assuming the 90 days trading horizon Q2 Metals Corp is expected to generate 5.35 times more return on investment than AGF Management. However, Q2 Metals is 5.35 times more volatile than AGF Management Limited. It trades about 0.13 of its potential returns per unit of risk. AGF Management Limited is currently generating about 0.13 per unit of risk. If you would invest  28.00  in Q2 Metals Corp on October 4, 2024 and sell it today you would earn a total of  49.00  from holding Q2 Metals Corp or generate 175.0% return on investment over 90 days.

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

Q2 Metals Corp  vs.  AGF Management Limited

Q2 Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2 Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AGF Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 2 (%) 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 Q2 Metals and AGF Management

The main advantage of trading using opposite Q2 Metals and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2 Metals 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 Q2 Metals Corp 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.