Correlation Between Simplify Interest and AGFiQ Market

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

Diversification Opportunities for Simplify Interest and AGFiQ Market

-0.7

Correlation Coefficient

Simplify Interest  AGFiQ Market

Excellent diversification

The 3 months correlation between Simplify and AGFiQ is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Interest Rate 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 Interest 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 Interest Rate 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 Interest i.e., Simplify Interest and AGFiQ Market go up and down completely randomly.

Pair Corralation between Simplify Interest and AGFiQ Market

Given the investment horizon of 90 days Simplify Interest Rate is expected to under-perform the AGFiQ Market. In addition to that, Simplify Interest is 1.65 times more volatile than AGFiQ Market Neutral. It trades about -0.02 of its total potential returns per unit of risk. AGFiQ Market Neutral is currently generating about 0.13 per unit of volatility. If you would invest  1,853  in AGFiQ Market Neutral on December 29, 2024 and sell it today you would earn a total of  211.00  from holding AGFiQ Market Neutral or generate 11.39% return on investment over 90 days.

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

Simplify Interest Rate  vs.  AGFiQ Market Neutral

Simplify Interest Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simplify Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Simplify Interest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 10 (%) 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 Interest and AGFiQ Market

The main advantage of trading using opposite Simplify Interest and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Interest 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 Interest Rate 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.