Correlation Between Aquagold International and Catalyst Hedged

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

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

Diversification Opportunities for Aquagold International and Catalyst Hedged

-0.37

Correlation Coefficient

Aquagold International  Catalyst Hedged

Very good diversification

The 3 months correlation between Aquagold and Catalyst is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Catalyst Hedged Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Hedged Modity 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 Catalyst Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Hedged Modity has no effect on the direction of Aquagold International i.e., Aquagold International and Catalyst Hedged go up and down completely randomly.

Pair Corralation between Aquagold International and Catalyst Hedged

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Catalyst Hedged. In addition to that, Aquagold International is 12.33 times more volatile than Catalyst Hedged Modity. It trades about -0.13 of its total potential returns per unit of risk. Catalyst Hedged Modity is currently generating about 0.15 per unit of volatility. If you would invest  886.00  in Catalyst Hedged Modity on December 22, 2024 and sell it today you would earn a total of  39.00  from holding Catalyst Hedged Modity or generate 4.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Aquagold International  vs.  Catalyst Hedged Modity

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.

Catalyst Hedged Modity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Hedged Modity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Catalyst Hedged is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Catalyst Hedged

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

The idea behind Aquagold International and Catalyst Hedged Modity 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.