Correlation Between Aquarius Engines and Clal Biotechnology

Can any of the company-specific risk be diversified away by investing in both Aquarius Engines and Clal Biotechnology 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 Aquarius Engines and Clal Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquarius Engines AM and Clal Biotechnology Industries, you can compare the effects of market volatilities on Aquarius Engines and Clal Biotechnology 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 Aquarius Engines with a short position of Clal Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquarius Engines and Clal Biotechnology.

Diversification Opportunities for Aquarius Engines and Clal Biotechnology

-0.28

Correlation Coefficient

Aquarius Engines  Clal Biotechnology

Very good diversification

The 3 months correlation between Aquarius and Clal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aquarius Engines AM and Clal Biotechnology Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clal Biotechnology and Aquarius Engines 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 Aquarius Engines AM are associated (or correlated) with Clal Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clal Biotechnology has no effect on the direction of Aquarius Engines i.e., Aquarius Engines and Clal Biotechnology go up and down completely randomly.

Pair Corralation between Aquarius Engines and Clal Biotechnology

Assuming the 90 days trading horizon Aquarius Engines AM is expected to generate 4.3 times more return on investment than Clal Biotechnology. However, Aquarius Engines is 4.3 times more volatile than Clal Biotechnology Industries. It trades about 0.12 of its potential returns per unit of risk. Clal Biotechnology Industries is currently generating about 0.0 per unit of risk. If you would invest  14,510  in Aquarius Engines AM on December 30, 2024 and sell it today you would earn a total of  6,480  from holding Aquarius Engines AM or generate 44.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aquarius Engines AM  vs.  Clal Biotechnology Industries

Aquarius Engines

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aquarius Engines AM are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aquarius Engines sustained solid returns over the last few months and may actually be approaching a breakup point.

Clal Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clal Biotechnology Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Clal Biotechnology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquarius Engines and Clal Biotechnology

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

The idea behind Aquarius Engines AM and Clal Biotechnology Industries 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.