Correlation Between A1 and Aqua Power
Can any of the company-specific risk be diversified away by investing in both A1 and Aqua Power 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 A1 and Aqua Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A1 Group and Aqua Power Systems, you can compare the effects of market volatilities on A1 and Aqua Power 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 A1 with a short position of Aqua Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1 and Aqua Power.
Diversification Opportunities for A1 and Aqua Power
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between A1 and Aqua is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding A1 Group and Aqua Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Power Systems and A1 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 A1 Group are associated (or correlated) with Aqua Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Power Systems has no effect on the direction of A1 i.e., A1 and Aqua Power go up and down completely randomly.
Pair Corralation between A1 and Aqua Power
Given the investment horizon of 90 days A1 Group is expected to generate 5.19 times more return on investment than Aqua Power. However, A1 is 5.19 times more volatile than Aqua Power Systems. It trades about 0.06 of its potential returns per unit of risk. Aqua Power Systems is currently generating about 0.01 per unit of risk. If you would invest 0.18 in A1 Group on January 4, 2025 and sell it today you would earn a total of 0.00 from holding A1 Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
A1 Group vs. Aqua Power Systems
Performance |
| Timeline |
| A1 Group |
| Aqua Power Systems |
A1 and Aqua Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A1 and Aqua Power
The main advantage of trading using opposite A1 and Aqua Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1 position performs unexpectedly, Aqua Power 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 Aqua Power will offset losses from the drop in Aqua Power's long position.The idea behind A1 Group and Aqua Power Systems 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.| Aqua Power vs. Supurva Healthcare Group | Aqua Power vs. Alpha Wastewater | Aqua Power vs. China Health Management | Aqua Power vs. Embrace Change Acquisition |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |