Correlation Between Vanguard Global and AGFiQ Market

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

Diversification Opportunities for Vanguard Global and AGFiQ Market

-0.91

Correlation Coefficient

Vanguard Global  AGFiQ Market

Pay attention - limited upside

The 3 months correlation between Vanguard and AGFiQ is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Momentum 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 Global 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 Global Momentum 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 Global i.e., Vanguard Global and AGFiQ Market go up and down completely randomly.

Pair Corralation between Vanguard Global and AGFiQ Market

Assuming the 90 days trading horizon Vanguard Global Momentum is expected to under-perform the AGFiQ Market. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Global Momentum is 1.19 times less risky than AGFiQ Market. The etf trades about -0.06 of its potential returns per unit of risk. The AGFiQ Market Neutral is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,930  in AGFiQ Market Neutral on September 23, 2024 and sell it today you would earn a total of  12.00  from holding AGFiQ Market Neutral or generate 0.62% return on investment over 90 days.

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

Vanguard Global Momentum  vs.  AGFiQ Market Neutral

Vanguard Global Momentum

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Global Momentum are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vanguard Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AGFiQ Market Neutral

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGFiQ Market Neutral has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, AGFiQ Market is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Global and AGFiQ Market

The main advantage of trading using opposite Vanguard Global and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global 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 Global Momentum 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.