Correlation Between Aquagold International and BLAC Old

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

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

Diversification Opportunities for Aquagold International and BLAC Old

0.07

Correlation Coefficient

Aquagold International  BLAC Old

Significant diversification

The 3 months correlation between Aquagold and BLAC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and BLAC Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLAC Old 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 BLAC Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLAC Old has no effect on the direction of Aquagold International i.e., Aquagold International and BLAC Old go up and down completely randomly.

Pair Corralation between Aquagold International and BLAC Old

Given the investment horizon of 90 days Aquagold International is expected to generate 0.53 times more return on investment than BLAC Old. However, Aquagold International is 1.9 times less risky than BLAC Old. It trades about -0.13 of its potential returns per unit of risk. BLAC Old is currently generating about -0.2 per unit of risk. If you would invest  0.04  in Aquagold International on December 22, 2024 and sell it today you would lose (0.02) from holding Aquagold International or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.73%
Values	Daily Returns

Aquagold International  vs.  BLAC Old

Aquagold International

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

BLAC Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLAC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Aquagold International and BLAC Old

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

The idea behind Aquagold International and BLAC Old 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.