Correlation Between AGF Management and Collins Foods

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

Diversification Opportunities for AGF Management and Collins Foods

0.33

Correlation Coefficient

AGF Management  Collins Foods

Weak diversification

The 3 months correlation between AGF and Collins is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and Collins Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods Limited 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods Limited has no effect on the direction of AGF Management i.e., AGF Management and Collins Foods go up and down completely randomly.

Pair Corralation between AGF Management and Collins Foods

Assuming the 90 days horizon AGF Management Limited is expected to generate 0.8 times more return on investment than Collins Foods. However, AGF Management Limited is 1.25 times less risky than Collins Foods. It trades about 0.18 of its potential returns per unit of risk. Collins Foods Limited is currently generating about 0.07 per unit of risk. If you would invest  599.00  in AGF Management Limited on April 24, 2025 and sell it today you would earn a total of  156.00  from holding AGF Management Limited or generate 26.04% return on investment over 90 days.

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

AGF Management Limited  vs.  Collins Foods Limited

AGF Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, AGF Management reported solid returns over the last few months and may actually be approaching a breakup point.

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Collins Foods may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with AGF Management and Collins Foods

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

The idea behind AGF Management Limited and Collins Foods 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..