Correlation Between AGF AS and Trifork Holding

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

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

Diversification Opportunities for AGF AS and Trifork Holding

0.65

Correlation Coefficient

AGF AS  Trifork Holding

Poor diversification

The 3 months correlation between AGF and Trifork is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AGF AS and Trifork Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trifork Holding AG and AGF AS 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 AS are associated (or correlated) with Trifork Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trifork Holding AG has no effect on the direction of AGF AS i.e., AGF AS and Trifork Holding go up and down completely randomly.

Pair Corralation between AGF AS and Trifork Holding

Assuming the 90 days trading horizon AGF AS is expected to generate 1.5 times less return on investment than Trifork Holding. But when comparing it to its historical volatility, AGF AS is 1.07 times less risky than Trifork Holding. It trades about 0.1 of its potential returns per unit of risk. Trifork Holding AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7,790  in Trifork Holding AG on February 2, 2025 and sell it today you would earn a total of  1,410  from holding Trifork Holding AG or generate 18.1% return on investment over 90 days.

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

AGF AS  vs.  Trifork Holding AG

AGF AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGF AS are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, AGF AS may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Trifork Holding AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trifork Holding AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Trifork Holding sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGF AS and Trifork Holding

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

The idea behind AGF AS and Trifork Holding AG 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..