Correlation Between White Mountains and Aquagold International
Can any of the company-specific risk be diversified away by investing in both White Mountains 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 White Mountains and Aquagold International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between White Mountains Insurance and Aquagold International, you can compare the effects of market volatilities on White Mountains 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 White Mountains with a short position of Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of White Mountains and Aquagold International.
Diversification Opportunities for White Mountains and Aquagold International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between White and Aquagold is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding White Mountains Insurance and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and White Mountains 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 White Mountains Insurance 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 White Mountains i.e., White Mountains and Aquagold International go up and down completely randomly.
Pair Corralation between White Mountains and Aquagold International
If you would invest 0.04 in Aquagold International on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Aquagold International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
White Mountains Insurance vs. Aquagold International
Performance |
| Timeline |
| White Mountains Insurance |
| Aquagold International |
White Mountains and Aquagold International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with White Mountains and Aquagold International
The main advantage of trading using opposite White Mountains and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if White Mountains 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.| White Mountains vs. NI Holdings | White Mountains vs. Donegal Group A | White Mountains vs. Donegal Group B | White Mountains vs. The Hanover Insurance |
| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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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