Correlation Between Aquagold International and Cool Technologies
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Cool Technologies 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 Cool Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Cool Technologies, you can compare the effects of market volatilities on Aquagold International and Cool Technologies 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 Cool Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Cool Technologies.
Diversification Opportunities for Aquagold International and Cool Technologies
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aquagold and Cool is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Cool Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Technologies 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 Cool Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Technologies has no effect on the direction of Aquagold International i.e., Aquagold International and Cool Technologies go up and down completely randomly.
Pair Corralation between Aquagold International and Cool Technologies
If you would invest 0.15 in Cool Technologies on August 27, 2024 and sell it today you would lose (0.14) from holding Cool Technologies or give up 93.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquagold International vs. Cool Technologies
Performance |
| Timeline |
| Aquagold International |
| Cool Technologies |
Aquagold International and Cool Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Cool Technologies
The main advantage of trading using opposite Aquagold International and Cool Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Cool Technologies 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 Cool Technologies will offset losses from the drop in Cool Technologies' long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Cool Technologies vs. FitLife Brands, Common | Cool Technologies vs. HUMANA INC | Cool Technologies vs. SCOR PK | Cool Technologies 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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