Correlation Between Aquagold International and Dollar General

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

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

Diversification Opportunities for Aquagold International and Dollar General

0.59

Correlation Coefficient

Aquagold International  Dollar General

Very weak diversification

The 3 months correlation between Aquagold and Dollar is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General 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 Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of Aquagold International i.e., Aquagold International and Dollar General go up and down completely randomly.

Pair Corralation between Aquagold International and Dollar General

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Dollar General. In addition to that, Aquagold International is 6.0 times more volatile than Dollar General. It trades about -0.21 of its total potential returns per unit of risk. Dollar General is currently generating about 0.12 per unit of volatility. If you would invest  7,106  in Dollar General on December 2, 2024 and sell it today you would earn a total of  312.00  from holding Dollar General or generate 4.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Aquagold International  vs.  Dollar General

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.

Dollar General

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dollar General has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Dollar General is not utilizing all of its potentials. The new stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Aquagold International and Dollar General

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

The idea behind Aquagold International and Dollar General 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.