Correlation Between AGFiQ Market and Cambria Tail
Can any of the company-specific risk be diversified away by investing in both AGFiQ Market and Cambria Tail 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 Cambria Tail 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 Cambria Tail Risk, you can compare the effects of market volatilities on AGFiQ Market and Cambria Tail 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 Cambria Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGFiQ Market and Cambria Tail.
Diversification Opportunities for AGFiQ Market and Cambria Tail
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGFiQ and Cambria is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AGFiQ Market Neutral and Cambria Tail Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Tail Risk 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 Cambria Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Tail Risk has no effect on the direction of AGFiQ Market i.e., AGFiQ Market and Cambria Tail go up and down completely randomly.
Pair Corralation between AGFiQ Market and Cambria Tail
Given the investment horizon of 90 days AGFiQ Market Neutral is expected to generate 1.32 times more return on investment than Cambria Tail. However, AGFiQ Market is 1.32 times more volatile than Cambria Tail Risk. It trades about 0.01 of its potential returns per unit of risk. Cambria Tail Risk is currently generating about -0.04 per unit of risk. If you would invest 1,777 in AGFiQ Market Neutral on November 2, 2024 and sell it today you would earn a total of 32.00 from holding AGFiQ Market Neutral or generate 1.8% 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. Cambria Tail Risk
Performance |
| Timeline |
| AGFiQ Market Neutral |
| Cambria Tail Risk |
AGFiQ Market and Cambria Tail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGFiQ Market and Cambria Tail
The main advantage of trading using opposite AGFiQ Market and Cambria Tail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGFiQ Market position performs unexpectedly, Cambria Tail 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 Cambria Tail will offset losses from the drop in Cambria Tail'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 |
| Cambria Tail vs. Amplify BlackSwan Growth | Cambria Tail vs. AGFiQ Market Neutral | Cambria Tail vs. Quadratic Interest Rate | Cambria Tail vs. AdvisorShares Dorsey Wright |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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