Correlation Between AGFiQ Market and EcoSynthetix

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

Diversification Opportunities for AGFiQ Market and EcoSynthetix

-0.02

Correlation Coefficient

AGFiQ Market  EcoSynthetix

Good diversification

The 3 months correlation between AGFiQ and EcoSynthetix is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding AGFiQ Market Neutral and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix 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 EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of AGFiQ Market i.e., AGFiQ Market and EcoSynthetix go up and down completely randomly.

Pair Corralation between AGFiQ Market and EcoSynthetix

Assuming the 90 days trading horizon AGFiQ Market is expected to generate 1.44 times less return on investment than EcoSynthetix. But when comparing it to its historical volatility, AGFiQ Market Neutral is 1.54 times less risky than EcoSynthetix. It trades about 0.16 of its potential returns per unit of risk. EcoSynthetix is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  397.00  in EcoSynthetix on December 5, 2024 and sell it today you would earn a total of  79.00  from holding EcoSynthetix or generate 19.9% return on investment over 90 days.

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

AGFiQ Market Neutral  vs.  EcoSynthetix

AGFiQ Market Neutral

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGFiQ Market Neutral are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, AGFiQ Market displayed solid returns over the last few months and may actually be approaching a breakup point.

EcoSynthetix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EcoSynthetix are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, EcoSynthetix displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AGFiQ Market and EcoSynthetix

The main advantage of trading using opposite AGFiQ Market and EcoSynthetix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGFiQ Market position performs unexpectedly, EcoSynthetix 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 EcoSynthetix will offset losses from the drop in EcoSynthetix's long position.

The idea behind AGFiQ Market Neutral and EcoSynthetix 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.