Correlation Between Aquagold International and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Sit Emerging 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 Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Sit Emerging Markets, you can compare the effects of market volatilities on Aquagold International and Sit Emerging 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 Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Sit Emerging.
Diversification Opportunities for Aquagold International and Sit Emerging
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Sit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets 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 Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Aquagold International i.e., Aquagold International and Sit Emerging go up and down completely randomly.
Pair Corralation between Aquagold International and Sit Emerging
Given the investment horizon of 90 days Aquagold International is expected to generate 122.4 times more return on investment than Sit Emerging. However, Aquagold International is 122.4 times more volatile than Sit Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 25.00 in Aquagold International on August 24, 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. Sit Emerging Markets
Performance |
| Timeline |
| Aquagold International |
| Sit Emerging Markets |
Aquagold International and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Sit Emerging
The main advantage of trading using opposite Aquagold International and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Sit Emerging 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 Sit Emerging will offset losses from the drop in Sit Emerging's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Sit Emerging vs. HUMANA INC | Sit Emerging vs. Aquagold International | Sit Emerging vs. Barloworld Ltd ADR | Sit Emerging vs. Morningstar Unconstrained Allocation |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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