Correlation Between Aquagold International and Prospect Capital
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Prospect Capital 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 Prospect Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Prospect Capital, you can compare the effects of market volatilities on Aquagold International and Prospect Capital 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 Prospect Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Prospect Capital.
Diversification Opportunities for Aquagold International and Prospect Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Prospect is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Prospect Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospect Capital 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 Prospect Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospect Capital has no effect on the direction of Aquagold International i.e., Aquagold International and Prospect Capital go up and down completely randomly.
Pair Corralation between Aquagold International and Prospect Capital
Given the investment horizon of 90 days Aquagold International is expected to generate 31.03 times more return on investment than Prospect Capital. However, Aquagold International is 31.03 times more volatile than Prospect Capital. It trades about 0.06 of its potential returns per unit of risk. Prospect Capital is currently generating about -0.02 per unit of risk. If you would invest 25.00 in Aquagold International on August 26, 2024 and sell it today you would lose (24.40) from holding Aquagold International or give up 97.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquagold International vs. Prospect Capital
Performance |
| Timeline |
| Aquagold International |
| Prospect Capital |
Aquagold International and Prospect Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Prospect Capital
The main advantage of trading using opposite Aquagold International and Prospect Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Prospect Capital 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 Prospect Capital will offset losses from the drop in Prospect Capital's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Prospect Capital vs. PowerUp Acquisition Corp | Prospect Capital vs. Aurora Innovation | Prospect Capital vs. HUMANA INC | Prospect Capital vs. Aquagold International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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