Correlation Between Aquagold International and Allstar Health

Can any of the company-specific risk be diversified away by investing in both Aquagold International and Allstar Health 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 Aquagold International and Allstar Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquagold International and Allstar Health Brands, you can compare the effects of market volatilities on Aquagold International and Allstar Health 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 Aquagold International with a short position of Allstar Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Allstar Health.

Diversification Opportunities for Aquagold International and Allstar Health

0.58

Correlation Coefficient

Aquagold International  Allstar Health

Very weak diversification

The 3 months correlation between Aquagold and Allstar is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Allstar Health Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstar Health Brands and Aquagold International 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 Aquagold International are associated (or correlated) with Allstar Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstar Health Brands has no effect on the direction of Aquagold International i.e., Aquagold International and Allstar Health go up and down completely randomly.

Pair Corralation between Aquagold International and Allstar Health

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Allstar Health. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 1.09 times less risky than Allstar Health. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Allstar Health Brands is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  0.08  in Allstar Health Brands on October 20, 2024 and sell it today you would lose (0.03) from holding Allstar Health Brands or give up 37.5% of portfolio value over 90 days.

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

Aquagold International  vs.  Allstar Health Brands

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Allstar Health Brands

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allstar Health Brands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Allstar Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aquagold International and Allstar Health

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

The idea behind Aquagold International and Allstar Health Brands 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .