Correlation Between Aquagold International and Northern Lights
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Northern Lights 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 Northern Lights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Northern Lights, you can compare the effects of market volatilities on Aquagold International and Northern Lights 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 Northern Lights. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Northern Lights.
Diversification Opportunities for Aquagold International and Northern Lights
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Northern Lights in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lights 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 Northern Lights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lights has no effect on the direction of Aquagold International i.e., Aquagold International and Northern Lights go up and down completely randomly.
Pair Corralation between Aquagold International and Northern Lights
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Northern Lights. In addition to that, Aquagold International is 7.85 times more volatile than Northern Lights. It trades about -0.02 of its total potential returns per unit of risk. Northern Lights is currently generating about 0.11 per unit of volatility. If you would invest 2,459 in Northern Lights on August 29, 2024 and sell it today you would earn a total of 538.00 from holding Northern Lights or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.23% |
| Values | Daily Returns |
Aquagold International vs. Northern Lights
Performance |
| Timeline |
| Aquagold International |
| Northern Lights |
Aquagold International and Northern Lights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Northern Lights
The main advantage of trading using opposite Aquagold International and Northern Lights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Northern Lights 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 Northern Lights will offset losses from the drop in Northern Lights' long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Northern Lights vs. All Asset Fund | Northern Lights vs. HUMANA INC | Northern Lights vs. Aquagold International | Northern Lights vs. Barloworld Ltd ADR |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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