Correlation Between Simplify Asset and AGFiQ Market
Can any of the company-specific risk be diversified away by investing in both Simplify Asset and AGFiQ Market 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 Simplify Asset and AGFiQ Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Asset Management and AGFiQ Market Neutral, you can compare the effects of market volatilities on Simplify Asset and AGFiQ Market 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 Simplify Asset with a short position of AGFiQ Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Asset and AGFiQ Market.
Diversification Opportunities for Simplify Asset and AGFiQ Market
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Simplify and AGFiQ is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Asset Management and AGFiQ Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFiQ Market Neutral and Simplify Asset 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 Simplify Asset Management are associated (or correlated) with AGFiQ Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFiQ Market Neutral has no effect on the direction of Simplify Asset i.e., Simplify Asset and AGFiQ Market go up and down completely randomly.
Pair Corralation between Simplify Asset and AGFiQ Market
Considering the 90-day investment horizon Simplify Asset Management is expected to under-perform the AGFiQ Market. In addition to that, Simplify Asset is 2.73 times more volatile than AGFiQ Market Neutral. It trades about -0.19 of its total potential returns per unit of risk. AGFiQ Market Neutral is currently generating about -0.01 per unit of volatility. If you would invest 1,989 in AGFiQ Market Neutral on August 31, 2024 and sell it today you would lose (94.00) from holding AGFiQ Market Neutral or give up 4.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 28.45% |
| Values | Daily Returns |
Simplify Asset Management vs. AGFiQ Market Neutral
Performance |
| Timeline |
| Simplify Asset Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AGFiQ Market Neutral |
Simplify Asset and AGFiQ Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Asset and AGFiQ Market
The main advantage of trading using opposite Simplify Asset and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Asset position performs unexpectedly, AGFiQ Market 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 AGFiQ Market will offset losses from the drop in AGFiQ Market's long position.The idea behind Simplify Asset Management and AGFiQ Market Neutral 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.| AGFiQ Market vs. Cambria Tail Risk | AGFiQ Market vs. IQ Merger Arbitrage | AGFiQ Market vs. Amplify BlackSwan Growth | AGFiQ Market 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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