Correlation Between Storage Vault and AGF Management

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

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

Diversification Opportunities for Storage Vault and AGF Management

-0.15

Correlation Coefficient

Storage Vault  AGF Management

Good diversification

The 3 months correlation between Storage and AGF is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Storage Vault Canada and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Storage Vault 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 Storage Vault Canada 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 Storage Vault i.e., Storage Vault and AGF Management go up and down completely randomly.

Pair Corralation between Storage Vault and AGF Management

Assuming the 90 days trading horizon Storage Vault Canada is expected to generate 0.9 times more return on investment than AGF Management. However, Storage Vault Canada is 1.11 times less risky than AGF Management. It trades about 0.02 of its potential returns per unit of risk. AGF Management Limited is currently generating about -0.03 per unit of risk. If you would invest  389.00  in Storage Vault Canada on December 30, 2024 and sell it today you would earn a total of  4.00  from holding Storage Vault Canada or generate 1.03% return on investment over 90 days.

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

Storage Vault Canada  vs.  AGF Management Limited

Storage Vault Canada

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Storage Vault Canada are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Storage Vault is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

AGF Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGF Management Limited has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Storage Vault and AGF Management

The main advantage of trading using opposite Storage Vault and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Storage Vault 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 Storage Vault Canada 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.