Correlation Between Aquagold International and AdvisorShares Restaurant

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

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

Diversification Opportunities for Aquagold International and AdvisorShares Restaurant

-0.05

Correlation Coefficient

Aquagold International  AdvisorShares Restaurant

Good diversification

The 3 months correlation between Aquagold and AdvisorShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and AdvisorShares Restaurant ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Restaurant 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 AdvisorShares Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Restaurant has no effect on the direction of Aquagold International i.e., Aquagold International and AdvisorShares Restaurant go up and down completely randomly.

Pair Corralation between Aquagold International and AdvisorShares Restaurant

Given the investment horizon of 90 days Aquagold International is expected to generate 46.76 times more return on investment than AdvisorShares Restaurant. However, Aquagold International is 46.76 times more volatile than AdvisorShares Restaurant ETF. It trades about 0.05 of its potential returns per unit of risk. AdvisorShares Restaurant ETF is currently generating about 0.07 per unit of risk. If you would invest  25.00  in Aquagold International on September 26, 2024 and sell it today you would lose (24.96) from holding Aquagold International or give up 99.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Aquagold International  vs.  AdvisorShares Restaurant ETF

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

AdvisorShares Restaurant

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AdvisorShares Restaurant ETF are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, AdvisorShares Restaurant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aquagold International and AdvisorShares Restaurant

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

The idea behind Aquagold International and AdvisorShares Restaurant ETF 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.