Correlation Between VCI Global and Aqua Metals
Can any of the company-specific risk be diversified away by investing in both VCI Global and Aqua Metals 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 VCI Global and Aqua Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VCI Global Limited and Aqua Metals, you can compare the effects of market volatilities on VCI Global and Aqua Metals 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 VCI Global with a short position of Aqua Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of VCI Global and Aqua Metals.
Diversification Opportunities for VCI Global and Aqua Metals
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VCI and Aqua is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding VCI Global Limited and Aqua Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Metals and VCI Global 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 VCI Global Limited are associated (or correlated) with Aqua Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Metals has no effect on the direction of VCI Global i.e., VCI Global and Aqua Metals go up and down completely randomly.
Pair Corralation between VCI Global and Aqua Metals
Given the investment horizon of 90 days VCI Global Limited is expected to under-perform the Aqua Metals. In addition to that, VCI Global is 2.06 times more volatile than Aqua Metals. It trades about -0.06 of its total potential returns per unit of risk. Aqua Metals is currently generating about -0.1 per unit of volatility. If you would invest 776.00 in Aqua Metals on August 31, 2024 and sell it today you would lose (537.00) from holding Aqua Metals or give up 69.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VCI Global Limited vs. Aqua Metals
Performance |
| Timeline |
| VCI Global Limited |
| Aqua Metals |
VCI Global and Aqua Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VCI Global and Aqua Metals
The main advantage of trading using opposite VCI Global and Aqua Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VCI Global position performs unexpectedly, Aqua Metals 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 Metals will offset losses from the drop in Aqua Metals' long position.| VCI Global vs. CRA International | VCI Global vs. ICF International | VCI Global vs. Forrester Research | VCI Global vs. Huron Consulting Group |
| Aqua Metals vs. LanzaTech Global | Aqua Metals vs. Waste Management | Aqua Metals vs. Clean Harbors | Aqua Metals vs. Casella Waste Systems |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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