Correlation Between Aquagold International and Ero Copper

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

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

Diversification Opportunities for Aquagold International and Ero Copper

0.53

Correlation Coefficient

Aquagold International  Ero Copper

Very weak diversification

The 3 months correlation between Aquagold and Ero is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper Corp 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 Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of Aquagold International i.e., Aquagold International and Ero Copper go up and down completely randomly.

Pair Corralation between Aquagold International and Ero Copper

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Ero Copper. In addition to that, Aquagold International is 14.38 times more volatile than Ero Copper Corp. It trades about -0.22 of its total potential returns per unit of risk. Ero Copper Corp is currently generating about 0.29 per unit of volatility. If you would invest  1,302  in Ero Copper Corp on October 20, 2024 and sell it today you would earn a total of  113.00  from holding Ero Copper Corp or generate 8.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Aquagold International  vs.  Ero Copper Corp

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.

Ero Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ero Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Aquagold International and Ero Copper

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

The idea behind Aquagold International and Ero Copper Corp 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.