Correlation Between MegaLong Canadian and AFC Ajax

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

By analyzing existing cross correlation between MegaLong Canadian Banks and AFC Ajax NV, you can compare the effects of market volatilities on MegaLong Canadian and AFC Ajax 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 MegaLong Canadian with a short position of AFC Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of MegaLong Canadian and AFC Ajax.

Diversification Opportunities for MegaLong Canadian and AFC Ajax

-0.73

Correlation Coefficient

MegaLong Canadian  AFC Ajax

Pay attention - limited upside

The 3 months correlation between MegaLong and AFC is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding MegaLong Canadian Banks and AFC Ajax NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Ajax NV and MegaLong Canadian 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 MegaLong Canadian Banks are associated (or correlated) with AFC Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Ajax NV has no effect on the direction of MegaLong Canadian i.e., MegaLong Canadian and AFC Ajax go up and down completely randomly.

Pair Corralation between MegaLong Canadian and AFC Ajax

Assuming the 90 days trading horizon MegaLong Canadian Banks is expected to generate 1.42 times more return on investment than AFC Ajax. However, MegaLong Canadian is 1.42 times more volatile than AFC Ajax NV. It trades about 0.25 of its potential returns per unit of risk. AFC Ajax NV is currently generating about -0.05 per unit of risk. If you would invest  3,002  in MegaLong Canadian Banks on September 9, 2025 and sell it today you would earn a total of  968.00  from holding MegaLong Canadian Banks or generate 32.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

MegaLong Canadian Banks  vs.  AFC Ajax NV

MegaLong Canadian Banks

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MegaLong Canadian Banks are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MegaLong Canadian displayed solid returns over the last few months and may actually be approaching a breakup point.

AFC Ajax NV

Risk-Adjusted Performance

Weakest

Over the last 90 days AFC Ajax NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AFC Ajax is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MegaLong Canadian and AFC Ajax

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

The idea behind MegaLong Canadian Banks and AFC Ajax NV 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.