Correlation Between Aqua Public and Bound
Can any of the company-specific risk be diversified away by investing in both Aqua Public and Bound 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 Aqua Public and Bound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqua Public and Bound and Beyond, you can compare the effects of market volatilities on Aqua Public and Bound 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 Aqua Public with a short position of Bound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Public and Bound.
Diversification Opportunities for Aqua Public and Bound
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aqua and Bound is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Public and Bound and Beyond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bound and Beyond and Aqua Public 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 Aqua Public are associated (or correlated) with Bound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bound and Beyond has no effect on the direction of Aqua Public i.e., Aqua Public and Bound go up and down completely randomly.
Pair Corralation between Aqua Public and Bound
Assuming the 90 days trading horizon Aqua Public is expected to generate 49.16 times more return on investment than Bound. However, Aqua Public is 49.16 times more volatile than Bound and Beyond. It trades about 0.08 of its potential returns per unit of risk. Bound and Beyond is currently generating about -0.02 per unit of risk. If you would invest 33.00 in Aqua Public on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Aqua Public or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqua Public vs. Bound and Beyond
Performance |
| Timeline |
| Aqua Public |
| Bound and Beyond |
Aqua Public and Bound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqua Public and Bound
The main advantage of trading using opposite Aqua Public and Bound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Public position performs unexpectedly, Bound 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 Bound will offset losses from the drop in Bound's long position.| Aqua Public vs. Big Camera | Aqua Public vs. Bangkok Chain Hospital | Aqua Public vs. Grande Asset Hotels | Aqua Public vs. Better World Green |
| Bound vs. BCPG Public | Bound vs. Aqua Public | Bound vs. Energy Absolute Public | Bound vs. Bangkok Aviation Fuel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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