Correlation Between Aquagold International and Henderson European
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Henderson European 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 Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Henderson European Focus, you can compare the effects of market volatilities on Aquagold International and Henderson European 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 Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Henderson European.
Diversification Opportunities for Aquagold International and Henderson European
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aquagold and Henderson is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus 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 Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Aquagold International i.e., Aquagold International and Henderson European go up and down completely randomly.
Pair Corralation between Aquagold International and Henderson European
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Henderson European. In addition to that, Aquagold International is 13.34 times more volatile than Henderson European Focus. It trades about -0.21 of its total potential returns per unit of risk. Henderson European Focus is currently generating about 0.22 per unit of volatility. If you would invest 4,725 in Henderson European Focus on November 28, 2024 and sell it today you would earn a total of 184.00 from holding Henderson European Focus or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquagold International vs. Henderson European Focus
Performance |
| Timeline |
| Aquagold International |
| Henderson European Focus |
Aquagold International and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Henderson European
The main advantage of trading using opposite Aquagold International and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Henderson European vs. Henderson Global Equity | Henderson European vs. Loomis Sayles Strategic | Henderson European vs. First Eagle Overseas | Henderson European vs. Henderson European Focus |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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