Correlation Between AGF Emerging and One Choice

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Can any of the company-specific risk be diversified away by investing in both AGF Emerging and One Choice 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 AGF Emerging and One Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGF Emerging Markets and One Choice Blend, you can compare the effects of market volatilities on AGF Emerging and One Choice 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 AGF Emerging with a short position of One Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGF Emerging and One Choice.

Diversification Opportunities for AGF Emerging and One Choice

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between AGQIX and AAAOX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AGF Emerging Markets and One Choice Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Choice Blend and AGF Emerging 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 AGF Emerging Markets are associated (or correlated) with One Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Choice Blend has no effect on the direction of AGF Emerging i.e., AGF Emerging and One Choice go up and down completely randomly.

Pair Corralation between AGF Emerging and One Choice

Assuming the 90 days horizon AGF Emerging Markets is expected to generate 2.1 times more return on investment than One Choice. However, AGF Emerging is 2.1 times more volatile than One Choice Blend. It trades about 0.34 of its potential returns per unit of risk. One Choice Blend is currently generating about 0.23 per unit of risk. If you would invest  753.00  in AGF Emerging Markets on August 28, 2022 and sell it today you would earn a total of  98.00  from holding AGF Emerging Markets or generate 13.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

AGF Emerging Markets  vs.  One Choice Blend

 Performance (%) 
       Timeline  
AGF Emerging Markets 
AGQIX Performance
0 of 100
Over the last 90 days AGF Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, AGF Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AGQIX Price Channel

One Choice Blend 
AAAOX Performance
0 of 100
Over the last 90 days One Choice Blend has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, One Choice is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AAAOX Price Channel

AGF Emerging and One Choice Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AGF Emerging and One Choice

The main advantage of trading using opposite AGF Emerging and One Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGF Emerging position performs unexpectedly, One Choice 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 One Choice will offset losses from the drop in One Choice's long position.
AGF Emerging vs. Oil Gas Ultrasector
The idea behind AGF Emerging Markets and One Choice Blend 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.
One Choice vs. Fidelity Select Energy
Check out your portfolio center. 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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