Correlation Between Aquagold International and 1911 Gold

Can any of the company-specific risk be diversified away by investing in both Aquagold International and 1911 Gold 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 1911 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquagold International and 1911 Gold Corp, you can compare the effects of market volatilities on Aquagold International and 1911 Gold 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 1911 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and 1911 Gold.

Diversification Opportunities for Aquagold International and 1911 Gold

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Correlation Coefficient

Aquagold International  1911 Gold

Pay attention - limited upside

The 3 months correlation between Aquagold and 1911 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and 1911 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1911 Gold Corp 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 1911 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1911 Gold Corp has no effect on the direction of Aquagold International i.e., Aquagold International and 1911 Gold go up and down completely randomly.

Pair Corralation between Aquagold International and 1911 Gold

Given the investment horizon of 90 days Aquagold International is expected to under-perform the 1911 Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 1.61 times less risky than 1911 Gold. The pink sheet trades about -0.02 of its potential returns per unit of risk. The 1911 Gold Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5.60  in 1911 Gold Corp on September 19, 2024 and sell it today you would earn a total of  5.40  from holding 1911 Gold Corp or generate 96.43% return on investment over 90 days.

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

Aquagold International  vs.  1911 Gold Corp

Aquagold International

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

1911 Gold Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 1911 Gold Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental drivers, 1911 Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and 1911 Gold

The main advantage of trading using opposite Aquagold International and 1911 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, 1911 Gold 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 1911 Gold will offset losses from the drop in 1911 Gold's long position.

The idea behind Aquagold International and 1911 Gold Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.