Correlation Between Bet-at-home and Aqua America
Can any of the company-specific risk be diversified away by investing in both Bet-at-home and Aqua America 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 Bet-at-home and Aqua America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between bet at home AG and Aqua America, you can compare the effects of market volatilities on Bet-at-home and Aqua America 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 Bet-at-home with a short position of Aqua America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet-at-home and Aqua America.
Diversification Opportunities for Bet-at-home and Aqua America
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bet-at-home and Aqua is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Aqua America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua America and Bet-at-home 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 bet at home AG are associated (or correlated) with Aqua America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua America has no effect on the direction of Bet-at-home i.e., Bet-at-home and Aqua America go up and down completely randomly.
Pair Corralation between Bet-at-home and Aqua America
Assuming the 90 days trading horizon bet at home AG is expected to under-perform the Aqua America. In addition to that, Bet-at-home is 2.3 times more volatile than Aqua America. It trades about -0.03 of its total potential returns per unit of risk. Aqua America is currently generating about -0.01 per unit of volatility. If you would invest 4,121 in Aqua America on September 14, 2024 and sell it today you would lose (493.00) from holding Aqua America or give up 11.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
bet at home AG vs. Aqua America
Performance |
| Timeline |
| bet at home |
| Aqua America |
Bet-at-home and Aqua America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bet-at-home and Aqua America
The main advantage of trading using opposite Bet-at-home and Aqua America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet-at-home position performs unexpectedly, Aqua America 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 Aqua America will offset losses from the drop in Aqua America's long position.| Bet-at-home vs. Apple Inc | Bet-at-home vs. Apple Inc | Bet-at-home vs. Apple Inc | Bet-at-home vs. Apple Inc |
| Aqua America vs. bet at home AG | Aqua America vs. PLAYMATES TOYS | Aqua America vs. CHINA TONTINE WINES | Aqua America vs. KB HOME |
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 the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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