Correlation Between Aqua Metals and Secure Energy

Can any of the company-specific risk be diversified away by investing in both Aqua Metals and Secure Energy 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 Aqua Metals and Secure Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aqua Metals and Secure Energy Services, you can compare the effects of market volatilities on Aqua Metals and Secure Energy 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 Aqua Metals with a short position of Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqua Metals and Secure Energy.

Diversification Opportunities for Aqua Metals and Secure Energy

-0.93

Correlation Coefficient

Aqua Metals  Secure Energy

Pay attention - limited upside

The 3 months correlation between Aqua and Secure is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Metals and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services and Aqua Metals 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 Aqua Metals are associated (or correlated) with Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Aqua Metals i.e., Aqua Metals and Secure Energy go up and down completely randomly.

Pair Corralation between Aqua Metals and Secure Energy

Given the investment horizon of 90 days Aqua Metals is expected to under-perform the Secure Energy. In addition to that, Aqua Metals is 2.04 times more volatile than Secure Energy Services. It trades about -0.04 of its total potential returns per unit of risk. Secure Energy Services is currently generating about 0.08 per unit of volatility. If you would invest  472.00  in Secure Energy Services on September 14, 2024 and sell it today you would earn a total of  676.00  from holding Secure Energy Services or generate 143.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.59%
Values	Daily Returns

Aqua Metals  vs.  Secure Energy Services

Aqua Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqua Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Secure Energy Services

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Energy Services are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Secure Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqua Metals and Secure Energy

The main advantage of trading using opposite Aqua Metals and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqua Metals position performs unexpectedly, Secure Energy 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 Secure Energy will offset losses from the drop in Secure Energy's long position.

The idea behind Aqua Metals and Secure Energy Services 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.