Correlation Between Solar Alliance and AGFiQ Market

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

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

Diversification Opportunities for Solar Alliance and AGFiQ Market

0.04

Correlation Coefficient

Solar Alliance  AGFiQ Market

Significant diversification

The 3 months correlation between Solar and AGFiQ is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Solar Alliance Energy 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 Solar Alliance 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 Solar Alliance Energy 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 Solar Alliance i.e., Solar Alliance and AGFiQ Market go up and down completely randomly.

Pair Corralation between Solar Alliance and AGFiQ Market

Assuming the 90 days trading horizon Solar Alliance Energy is not expected to generate positive returns. Moreover, Solar Alliance is 11.78 times more volatile than AGFiQ Market Neutral. It trades away all of its potential returns to assume current level of volatility. AGFiQ Market Neutral is currently generating about 0.31 per unit of risk. If you would invest  1,932  in AGFiQ Market Neutral on December 5, 2024 and sell it today you would earn a total of  227.00  from holding AGFiQ Market Neutral or generate 11.75% return on investment over 90 days.

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

Solar Alliance Energy  vs.  AGFiQ Market Neutral

Solar Alliance Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Solar Alliance Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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.

Pair Trading with Solar Alliance and AGFiQ Market

The main advantage of trading using opposite Solar Alliance and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solar Alliance 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 Solar Alliance Energy 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.