Correlation Between ALEFARM BREWING and AGF Management

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

By analyzing existing cross correlation between ALEFARM BREWING DK 05 and AGF Management Limited, you can compare the effects of market volatilities on ALEFARM BREWING 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 ALEFARM BREWING with a short position of AGF Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and AGF Management.

Diversification Opportunities for ALEFARM BREWING and AGF Management

-0.2

Correlation Coefficient

ALEFARM BREWING  AGF Management

Good diversification

The 3 months correlation between ALEFARM and AGF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 ALEFARM BREWING i.e., ALEFARM BREWING and AGF Management go up and down completely randomly.

Pair Corralation between ALEFARM BREWING and AGF Management

Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to under-perform the AGF Management. In addition to that, ALEFARM BREWING is 2.31 times more volatile than AGF Management Limited. It trades about -0.03 of its total potential returns per unit of risk. AGF Management Limited is currently generating about 0.29 per unit of volatility. If you would invest  496.00  in AGF Management Limited on September 13, 2024 and sell it today you would earn a total of  229.00  from holding AGF Management Limited or generate 46.17% return on investment over 90 days.

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

ALEFARM BREWING DK 05  vs.  AGF Management Limited

ALEFARM BREWING DK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ALEFARM BREWING DK 05 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AGF Management

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGF Management reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ALEFARM BREWING and AGF Management

The main advantage of trading using opposite ALEFARM BREWING and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.