Correlation Between Vanguard and AGFiQ Market

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

By analyzing existing cross correlation between Vanguard SP 500 and AGFiQ Market Neutral, you can compare the effects of market volatilities on Vanguard 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 Vanguard with a short position of AGFiQ Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard and AGFiQ Market.

Diversification Opportunities for Vanguard and AGFiQ Market

-0.87

Correlation Coefficient

Vanguard  AGFiQ Market

Pay attention - limited upside

The 3 months correlation between Vanguard and AGFiQ is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard SP 500 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 Vanguard 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 Vanguard SP 500 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 Vanguard i.e., Vanguard and AGFiQ Market go up and down completely randomly.

Pair Corralation between Vanguard and AGFiQ Market

Assuming the 90 days trading horizon Vanguard SP 500 is expected to under-perform the AGFiQ Market. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard SP 500 is 1.81 times less risky than AGFiQ Market. The etf trades about -0.09 of its potential returns per unit of risk. The AGFiQ Market Neutral is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,938  in AGFiQ Market Neutral on December 30, 2024 and sell it today you would earn a total of  221.00  from holding AGFiQ Market Neutral or generate 11.4% return on investment over 90 days.

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

Vanguard SP 500  vs.  AGFiQ Market Neutral

Vanguard SP 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vanguard SP 500 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vanguard is not utilizing all of its potentials. The recent stock price disarray, 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 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, AGFiQ Market may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vanguard and AGFiQ Market

The main advantage of trading using opposite Vanguard and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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 Vanguard SP 500 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.