Correlation Between Core Alternative and AGFiQ Market

Can any of the company-specific risk be diversified away by investing in both Core Alternative 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 Core Alternative and AGFiQ Market into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Core Alternative ETF and AGFiQ Market Neutral, you can compare the effects of market volatilities on Core Alternative 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 Core Alternative with a short position of AGFiQ Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Alternative and AGFiQ Market.

Diversification Opportunities for Core Alternative and AGFiQ Market

0.75

Correlation Coefficient

Core Alternative  AGFiQ Market

Poor diversification

The 3 months correlation between Core and AGFiQ is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF 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 Core Alternative 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 Core Alternative ETF 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 Core Alternative i.e., Core Alternative and AGFiQ Market go up and down completely randomly.

Pair Corralation between Core Alternative and AGFiQ Market

Given the investment horizon of 90 days Core Alternative ETF is expected to generate 0.53 times more return on investment than AGFiQ Market. However, Core Alternative ETF is 1.88 times less risky than AGFiQ Market. It trades about -0.34 of its potential returns per unit of risk. AGFiQ Market Neutral is currently generating about -0.25 per unit of risk. If you would invest  2,653  in Core Alternative ETF on September 19, 2024 and sell it today you would lose (87.00) from holding Core Alternative ETF or give up 3.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Core Alternative ETF  vs.  AGFiQ Market Neutral

Core Alternative ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Alternative ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Core Alternative is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

AGFiQ Market Neutral

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGFiQ Market Neutral has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, AGFiQ Market is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Core Alternative and AGFiQ Market

The main advantage of trading using opposite Core Alternative and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Alternative 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 Core Alternative ETF 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.