Correlation Between Roku and AGF AS
Can any of the company-specific risk be diversified away by investing in both Roku 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 Roku and AGF AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and AGF AS, you can compare the effects of market volatilities on Roku 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 Roku with a short position of AGF AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and AGF AS.
Diversification Opportunities for Roku and AGF AS
Excellent diversification
The 3 months correlation between Roku and AGF is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and AGF AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF AS and Roku 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 Roku Inc 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 Roku i.e., Roku and AGF AS go up and down completely randomly.
Pair Corralation between Roku and AGF AS
Given the investment horizon of 90 days Roku Inc is expected to under-perform the AGF AS. In addition to that, Roku is 2.13 times more volatile than AGF AS. It trades about -0.08 of its total potential returns per unit of risk. AGF AS is currently generating about 0.08 per unit of volatility. If you would invest 63.00 in AGF AS on January 25, 2024 and sell it today you would earn a total of 1.00 from holding AGF AS or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Roku Inc vs. AGF AS
Performance |
| Timeline |
| Roku Inc |
| AGF AS |
Roku and AGF AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and AGF AS
The main advantage of trading using opposite Roku and AGF AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku 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 Roku Inc 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.| AGF AS vs. Tivoli AS | AGF AS vs. PARKEN Sport Entertainment | AGF AS vs. Broendbyernes IF Fodbold | AGF AS vs. Silkeborg IF Invest |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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