Correlation Between Aquagold International and Stone Ridge

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Can any of the company-specific risk be diversified away by investing in both Aquagold International and Stone Ridge 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 Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Stone Ridge Diversified, you can compare the effects of market volatilities on Aquagold International and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Stone Ridge.

Diversification Opportunities for Aquagold International and Stone Ridge

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Aquagold and Stone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Aquagold International i.e., Aquagold International and Stone Ridge go up and down completely randomly.

Pair Corralation between Aquagold International and Stone Ridge

If you would invest  1,132  in Stone Ridge Diversified on September 13, 2024 and sell it today you would earn a total of  10.00  from holding Stone Ridge Diversified or generate 0.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aquagold International  vs.  Stone Ridge Diversified

 Performance 
       Timeline  
Aquagold International 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Stone Ridge Diversified 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Stone Ridge Diversified are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Stone Ridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aquagold International and Stone Ridge Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aquagold International and Stone Ridge

The main advantage of trading using opposite Aquagold International and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.
The idea behind Aquagold International and Stone Ridge Diversified pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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