Correlation Between Aquagold International and Small Cap
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Small Cap Equity, you can compare the effects of market volatilities on Aquagold International and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Small Cap.
Diversification Opportunities for Aquagold International and Small Cap
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aquagold and Small is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Equity 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Equity has no effect on the direction of Aquagold International i.e., Aquagold International and Small Cap go up and down completely randomly.
Pair Corralation between Aquagold International and Small Cap
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Small Cap. In addition to that, Aquagold International is 11.13 times more volatile than Small Cap Equity. It trades about -0.22 of its total potential returns per unit of risk. Small Cap Equity is currently generating about -0.27 per unit of volatility. If you would invest 1,855 in Small Cap Equity on November 27, 2024 and sell it today you would lose (97.00) from holding Small Cap Equity or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aquagold International vs. Small Cap Equity
Performance |
| Timeline |
| Aquagold International |
| Small Cap Equity |
Aquagold International and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Small Cap
The main advantage of trading using opposite Aquagold International and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Small Cap vs. Growth Allocation Fund | Small Cap vs. Defensive Market Strategies | Small Cap vs. Defensive Market Strategies | Small Cap vs. Value Equity Institutional |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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