Correlation Between Simplify Exchange and AGFiQ Market

Can any of the company-specific risk be diversified away by investing in both Simplify Exchange 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 Exchange 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 Exchange Traded and AGFiQ Market Neutral, you can compare the effects of market volatilities on Simplify Exchange 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 Exchange with a short position of AGFiQ Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and AGFiQ Market.

Diversification Opportunities for Simplify Exchange and AGFiQ Market

0.16

Correlation Coefficient

Simplify Exchange  AGFiQ Market

Average diversification

The 3 months correlation between Simplify and AGFiQ is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded 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 Exchange 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 Exchange Traded 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 Exchange i.e., Simplify Exchange and AGFiQ Market go up and down completely randomly.

Pair Corralation between Simplify Exchange and AGFiQ Market

Considering the 90-day investment horizon Simplify Exchange is expected to generate 1.23 times less return on investment than AGFiQ Market. But when comparing it to its historical volatility, Simplify Exchange Traded is 1.57 times less risky than AGFiQ Market. It trades about 0.14 of its potential returns per unit of risk. AGFiQ Market Neutral is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,799  in AGFiQ Market Neutral on December 1, 2024 and sell it today you would earn a total of  153.00  from holding AGFiQ Market Neutral or generate 8.5% return on investment over 90 days.

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

Simplify Exchange Traded  vs.  AGFiQ Market Neutral

Simplify Exchange Traded

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Simplify Exchange may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AGFiQ Market Neutral

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGFiQ Market Neutral are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, AGFiQ Market may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Simplify Exchange and AGFiQ Market

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

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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 Valuation module to check real value of public entities based on technical and fundamental data.