Correlation Between AGFiQ Market and First Trust
Can any of the company-specific risk be diversified away by investing in both AGFiQ Market and First Trust 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 First Trust 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 First Trust Managed, you can compare the effects of market volatilities on AGFiQ Market and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGFiQ Market and First Trust.
Diversification Opportunities for AGFiQ Market and First Trust
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGFiQ and First is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding AGFiQ Market Neutral and First Trust Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Managed 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Managed has no effect on the direction of AGFiQ Market i.e., AGFiQ Market and First Trust go up and down completely randomly.
Pair Corralation between AGFiQ Market and First Trust
Given the investment horizon of 90 days AGFiQ Market Neutral is expected to under-perform the First Trust. In addition to that, AGFiQ Market is 1.99 times more volatile than First Trust Managed. It trades about -0.01 of its total potential returns per unit of risk. First Trust Managed is currently generating about 0.03 per unit of volatility. If you would invest 4,784 in First Trust Managed on September 1, 2024 and sell it today you would earn a total of 85.00 from holding First Trust Managed or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
AGFiQ Market Neutral vs. First Trust Managed
Performance |
| Timeline |
| AGFiQ Market Neutral |
| First Trust Managed |
AGFiQ Market and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGFiQ Market and First Trust
The main advantage of trading using opposite AGFiQ Market and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGFiQ Market position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust'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 |
| First Trust vs. WisdomTree Managed Futures | First Trust vs. First Trust LongShort | First Trust vs. First Trust Alternative | First Trust vs. iMGP DBi Managed |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |