Correlation Between AGF Management and ETFS Coffee

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

Diversification Opportunities for AGF Management and ETFS Coffee

-0.76

Correlation Coefficient

AGF Management  ETFS Coffee

Pay attention - limited upside

The 3 months correlation between AGF and ETFS is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding AGF Management Limited and ETFS Coffee ETC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Coffee ETC 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 ETFS Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Coffee ETC has no effect on the direction of AGF Management i.e., AGF Management and ETFS Coffee go up and down completely randomly.

Pair Corralation between AGF Management and ETFS Coffee

Assuming the 90 days horizon AGF Management Limited is expected to generate 1.03 times more return on investment than ETFS Coffee. However, AGF Management is 1.03 times more volatile than ETFS Coffee ETC. It trades about 0.18 of its potential returns per unit of risk. ETFS Coffee ETC is currently generating about -0.18 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AGF Management Limited  vs.  ETFS Coffee ETC

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.

ETFS Coffee ETC

Risk-Adjusted Performance

Very Weak

Over the last 90 days ETFS Coffee ETC 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 August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AGF Management and ETFS Coffee

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

The idea behind AGF Management Limited and ETFS Coffee ETC 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.