Correlation Between GelStat Corp and Aquagold International
Can any of the company-specific risk be diversified away by investing in both GelStat Corp and Aquagold International 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 GelStat Corp and Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GelStat Corp and Aquagold International, you can compare the effects of market volatilities on GelStat Corp and Aquagold International 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 GelStat Corp with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GelStat Corp and Aquagold International.
Diversification Opportunities for GelStat Corp and Aquagold International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GelStat and Aquagold is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GelStat Corp and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and GelStat Corp 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 GelStat Corp are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of GelStat Corp i.e., GelStat Corp and Aquagold International go up and down completely randomly.
Pair Corralation between GelStat Corp and Aquagold International
Given the investment horizon of 90 days GelStat Corp is expected to generate 1.02 times more return on investment than Aquagold International. However, GelStat Corp is 1.02 times more volatile than Aquagold International. It trades about -0.07 of its potential returns per unit of risk. Aquagold International is currently generating about -0.21 per unit of risk. If you would invest 0.04 in GelStat Corp on November 25, 2024 and sell it today you would lose (0.01) from holding GelStat Corp or give up 25.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
GelStat Corp vs. Aquagold International
Performance |
Timeline |
GelStat Corp |
Aquagold International |
GelStat Corp and Aquagold International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GelStat Corp and Aquagold International
The main advantage of trading using opposite GelStat Corp and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GelStat Corp position performs unexpectedly, Aquagold International 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 Aquagold International will offset losses from the drop in Aquagold International's long position.GelStat Corp vs. Rimrock Gold Corp | ||
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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.
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