Correlation Between Jaxon Mining and AGF Management

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

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

Diversification Opportunities for Jaxon Mining and AGF Management

0.45

Correlation Coefficient

Jaxon Mining  AGF Management

Very weak diversification

The 3 months correlation between Jaxon and AGF is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jaxon Mining and AGF Management Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF Management and Jaxon Mining 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 Jaxon Mining are associated (or correlated) with AGF Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF Management has no effect on the direction of Jaxon Mining i.e., Jaxon Mining and AGF Management go up and down completely randomly.

Pair Corralation between Jaxon Mining and AGF Management

Assuming the 90 days horizon Jaxon Mining is not expected to generate positive returns. Moreover, Jaxon Mining is 19.18 times more volatile than AGF Management Limited. It trades away all of its potential returns to assume current level of volatility. AGF Management Limited is currently generating about -0.11 per unit of risk. If you would invest  2.00  in Jaxon Mining on February 5, 2024 and sell it today you would lose (1.00) from holding Jaxon Mining or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Jaxon Mining  vs.  AGF Management Limited

Jaxon Mining

Risk-Adjusted Performance

8 of 100

OK

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

AGF Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGF Management Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental drivers, AGF Management may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Jaxon Mining and AGF Management

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

The idea behind Jaxon Mining and AGF Management 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.