Correlation Between AGF Management and Blackhawk Growth

Can any of the company-specific risk be diversified away by investing in both AGF Management and Blackhawk Growth 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 Blackhawk Growth 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 Blackhawk Growth Corp, you can compare the effects of market volatilities on AGF Management and Blackhawk Growth 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 Blackhawk Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Management and Blackhawk Growth.

Diversification Opportunities for AGF Management and Blackhawk Growth

-0.63

Correlation Coefficient

AGF Management  Blackhawk Growth

Excellent diversification

The 3 months correlation between AGF and Blackhawk is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Blackhawk Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackhawk Growth Corp 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 Blackhawk Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackhawk Growth Corp has no effect on the direction of AGF Management i.e., AGF Management and Blackhawk Growth go up and down completely randomly.

Pair Corralation between AGF Management and Blackhawk Growth

Assuming the 90 days horizon AGF Management Limited is expected to generate 0.18 times more return on investment than Blackhawk Growth. However, AGF Management Limited is 5.46 times less risky than Blackhawk Growth. It trades about 0.25 of its potential returns per unit of risk. Blackhawk Growth Corp is currently generating about -0.13 per unit of risk. If you would invest  583.00  in AGF Management Limited on August 30, 2024 and sell it today you would earn a total of  211.00  from holding AGF Management Limited or generate 36.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

AGF Management Limited  vs.  Blackhawk Growth Corp

AGF Management

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, AGF Management reported solid returns over the last few months and may actually be approaching a breakup point.

Blackhawk Growth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackhawk Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AGF Management and Blackhawk Growth

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

The idea behind AGF Management Limited and Blackhawk Growth Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.