Correlation Between Vecima Networks and AGF Management

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

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

Diversification Opportunities for Vecima Networks and AGF Management

-0.76

Correlation Coefficient

Vecima Networks  AGF Management

Pay attention - limited upside

The 3 months correlation between Vecima and AGF is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Vecima Networks and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Vecima Networks 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 Vecima Networks 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 Vecima Networks i.e., Vecima Networks and AGF Management go up and down completely randomly.

Pair Corralation between Vecima Networks and AGF Management

Assuming the 90 days trading horizon Vecima Networks is expected to under-perform the AGF Management. In addition to that, Vecima Networks is 1.0 times more volatile than AGF Management Limited. It trades about -0.21 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.24 per unit of volatility. If you would invest  800.00  in AGF Management Limited on September 15, 2024 and sell it today you would earn a total of  283.00  from holding AGF Management Limited or generate 35.38% return on investment over 90 days.

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

Vecima Networks  vs.  AGF Management Limited

Vecima Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vecima Networks 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 primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

AGF Management

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, AGF Management unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vecima Networks and AGF Management

The main advantage of trading using opposite Vecima Networks and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vecima Networks 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 Vecima Networks 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..