Correlation Between Aquagold International and Amplify CWP

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

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

Diversification Opportunities for Aquagold International and Amplify CWP

0.19

Correlation Coefficient

Aquagold International  Amplify CWP

Average diversification

The 3 months correlation between Aquagold and Amplify is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Amplify CWP Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify CWP Enhanced 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 Amplify CWP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify CWP Enhanced has no effect on the direction of Aquagold International i.e., Aquagold International and Amplify CWP go up and down completely randomly.

Pair Corralation between Aquagold International and Amplify CWP

Given the investment horizon of 90 days Aquagold International is expected to generate 87.79 times more return on investment than Amplify CWP. However, Aquagold International is 87.79 times more volatile than Amplify CWP Enhanced. It trades about 0.05 of its potential returns per unit of risk. Amplify CWP Enhanced is currently generating about 0.07 per unit of risk. If you would invest  17.00  in Aquagold International on October 4, 2024 and sell it today you would lose (16.96) from holding Aquagold International or give up 99.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aquagold International  vs.  Amplify CWP Enhanced

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Amplify CWP Enhanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify CWP Enhanced has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Amplify CWP is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Amplify CWP

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

The idea behind Aquagold International and Amplify CWP Enhanced 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.