Correlation Between Aquagold International and FAT Brands
Can any of the company-specific risk be diversified away by investing in both Aquagold International and FAT Brands 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 Aquagold International and FAT Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and FAT Brands, you can compare the effects of market volatilities on Aquagold International and FAT Brands 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 Aquagold International with a short position of FAT Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and FAT Brands.
Diversification Opportunities for Aquagold International and FAT Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and FAT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and FAT Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAT Brands and Aquagold International 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 Aquagold International are associated (or correlated) with FAT Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAT Brands has no effect on the direction of Aquagold International i.e., Aquagold International and FAT Brands go up and down completely randomly.
Pair Corralation between Aquagold International and FAT Brands
Given the investment horizon of 90 days Aquagold International is expected to generate 3.01 times more return on investment than FAT Brands. However, Aquagold International is 3.01 times more volatile than FAT Brands. It trades about 0.0 of its potential returns per unit of risk. FAT Brands is currently generating about -0.02 per unit of risk. If you would invest 1.60 in Aquagold International on August 31, 2024 and sell it today you would lose (1.00) from holding Aquagold International or give up 62.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Aquagold International vs. FAT Brands
Performance |
| Timeline |
| Aquagold International |
| FAT Brands |
Aquagold International and FAT Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and FAT Brands
The main advantage of trading using opposite Aquagold International and FAT Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, FAT Brands 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 FAT Brands will offset losses from the drop in FAT Brands' long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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