Correlation Between AGF Management and HUDSON GLOBAL

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

By analyzing existing cross correlation between AGF Management Limited and HUDSON GLOBAL INCDL 001, you can compare the effects of market volatilities on AGF Management and HUDSON GLOBAL 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 AGF Management with a short position of HUDSON GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and HUDSON GLOBAL.

Diversification Opportunities for AGF Management and HUDSON GLOBAL

-0.43

Correlation Coefficient

AGF Management  HUDSON GLOBAL

Very good diversification

The 3 months correlation between AGF and HUDSON is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and HUDSON GLOBAL INCDL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON GLOBAL INCDL and AGF Management 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 AGF Management Limited are associated (or correlated) with HUDSON GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUDSON GLOBAL INCDL has no effect on the direction of AGF Management i.e., AGF Management and HUDSON GLOBAL go up and down completely randomly.

Pair Corralation between AGF Management and HUDSON GLOBAL

Assuming the 90 days horizon AGF Management Limited is expected to generate 0.7 times more return on investment than HUDSON GLOBAL. However, AGF Management Limited is 1.44 times less risky than HUDSON GLOBAL. It trades about 0.26 of its potential returns per unit of risk. HUDSON GLOBAL INCDL 001 is currently generating about 0.0 per unit of risk. If you would invest  521.00  in AGF Management Limited on September 18, 2024 and sell it today you would earn a total of  204.00  from holding AGF Management Limited or generate 39.16% return on investment over 90 days.

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

AGF Management Limited  vs.  HUDSON GLOBAL INCDL 001

AGF Management

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 20 (%) 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.

HUDSON GLOBAL INCDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUDSON GLOBAL INCDL 001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, HUDSON GLOBAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AGF Management and HUDSON GLOBAL

The main advantage of trading using opposite AGF Management and HUDSON GLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Management position performs unexpectedly, HUDSON GLOBAL 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 HUDSON GLOBAL will offset losses from the drop in HUDSON GLOBAL's long position.

The idea behind AGF Management Limited and HUDSON GLOBAL INCDL 001 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.