Correlation Between Aquagold International and Baron Opportunity

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

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

Diversification Opportunities for Aquagold International and Baron Opportunity

0.0

Correlation Coefficient

Aquagold International  Baron Opportunity

Pay attention - limited upside

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

Pair Corralation between Aquagold International and Baron Opportunity

If you would invest  4,698  in Baron Opportunity Fund on September 19, 2024 and sell it today you would earn a total of  44.00  from holding Baron Opportunity Fund or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Aquagold International  vs.  Baron Opportunity Fund

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 fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Baron Opportunity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Baron Opportunity Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Baron Opportunity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aquagold International and Baron Opportunity

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

The idea behind Aquagold International and Baron Opportunity Fund 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..