Correlation Between AGFiQ Market and Quadratic Deflation
Can any of the company-specific risk be diversified away by investing in both AGFiQ Market and Quadratic Deflation 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 AGFiQ Market and Quadratic Deflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGFiQ Market Neutral and Quadratic Deflation ETF, you can compare the effects of market volatilities on AGFiQ Market and Quadratic Deflation 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 AGFiQ Market with a short position of Quadratic Deflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGFiQ Market and Quadratic Deflation.
Diversification Opportunities for AGFiQ Market and Quadratic Deflation
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGFiQ and Quadratic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding AGFiQ Market Neutral and Quadratic Deflation ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadratic Deflation ETF and AGFiQ Market 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 AGFiQ Market Neutral are associated (or correlated) with Quadratic Deflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadratic Deflation ETF has no effect on the direction of AGFiQ Market i.e., AGFiQ Market and Quadratic Deflation go up and down completely randomly.
Pair Corralation between AGFiQ Market and Quadratic Deflation
Given the investment horizon of 90 days AGFiQ Market Neutral is expected to under-perform the Quadratic Deflation. But the etf apears to be less risky and, when comparing its historical volatility, AGFiQ Market Neutral is 1.4 times less risky than Quadratic Deflation. The etf trades about -0.15 of its potential returns per unit of risk. The Quadratic Deflation ETF is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,401 in Quadratic Deflation ETF on August 29, 2024 and sell it today you would earn a total of 23.00 from holding Quadratic Deflation ETF or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGFiQ Market Neutral vs. Quadratic Deflation ETF
Performance |
| Timeline |
| AGFiQ Market Neutral |
| Quadratic Deflation ETF |
AGFiQ Market and Quadratic Deflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGFiQ Market and Quadratic Deflation
The main advantage of trading using opposite AGFiQ Market and Quadratic Deflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGFiQ Market position performs unexpectedly, Quadratic Deflation 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 Quadratic Deflation will offset losses from the drop in Quadratic Deflation's long position.| AGFiQ Market vs. Cambria Tail Risk | AGFiQ Market vs. IQ Merger Arbitrage | AGFiQ Market vs. Amplify BlackSwan Growth | AGFiQ Market vs. AdvisorShares Dorsey Wright |
| Quadratic Deflation vs. SPDR Barclays Short | Quadratic Deflation vs. SPDR Portfolio Intermediate | Quadratic Deflation vs. SPDR Barclays Long | Quadratic Deflation vs. SPDR Barclays Intermediate |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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