Correlation Between Impero AS and AGF AS

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

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

Diversification Opportunities for Impero AS and AGF AS

0.38

Correlation Coefficient

Impero AS  AGF AS

Weak diversification

The 3 months correlation between Impero and AGF is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Impero AS and AGF AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF AS and Impero 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 Impero AS are associated (or correlated) with AGF AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF AS has no effect on the direction of Impero AS i.e., Impero AS and AGF AS go up and down completely randomly.

Pair Corralation between Impero AS and AGF AS

Assuming the 90 days trading horizon Impero AS is expected to generate 1.76 times more return on investment than AGF AS. However, Impero AS is 1.76 times more volatile than AGF AS. It trades about 0.1 of its potential returns per unit of risk. AGF AS is currently generating about -0.01 per unit of risk. If you would invest  620.00  in Impero AS on January 31, 2025 and sell it today you would earn a total of  75.00  from holding Impero AS or generate 12.1% return on investment over 90 days.

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

Impero AS  vs.  AGF AS

Impero AS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Impero AS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Impero AS may actually be approaching a critical reversion point that can send shares even higher in June 2025.

AGF AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGF AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, AGF AS exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Impero AS and AGF AS

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

The idea behind Impero AS and AGF AS 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.