Correlation Between Wilmington Capital and AGF Management

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

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

Diversification Opportunities for Wilmington Capital and AGF Management

0.13

Correlation Coefficient

Wilmington Capital  AGF Management

Average diversification

The 3 months correlation between Wilmington and AGF is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Capital Management and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Wilmington Capital 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 Wilmington Capital Management 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 Wilmington Capital i.e., Wilmington Capital and AGF Management go up and down completely randomly.

Pair Corralation between Wilmington Capital and AGF Management

Assuming the 90 days trading horizon Wilmington Capital Management is expected to under-perform the AGF Management. In addition to that, Wilmington Capital is 1.9 times more volatile than AGF Management Limited. It trades about -0.3 of its total potential returns per unit of risk. AGF Management Limited is currently generating about -0.01 per unit of volatility. If you would invest  1,126  in AGF Management Limited on September 13, 2024 and sell it today you would lose (7.00) from holding AGF Management Limited or give up 0.62% of portfolio value over 90 days.

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

Wilmington Capital Management  vs.  AGF Management Limited

Wilmington Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AGF Management

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 22 (%) 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 Wilmington Capital and AGF Management

The main advantage of trading using opposite Wilmington Capital and AGF Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Capital 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 Wilmington Capital Management 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.