Correlation Between Aquagold International and Fam Value

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

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

Diversification Opportunities for Aquagold International and Fam Value

0.27

Correlation Coefficient

Aquagold International  Fam Value

Modest diversification

The 3 months correlation between Aquagold and Fam is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Fam Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fam Value Fund 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 Fam Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fam Value Fund has no effect on the direction of Aquagold International i.e., Aquagold International and Fam Value go up and down completely randomly.

Pair Corralation between Aquagold International and Fam Value

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Fam Value. In addition to that, Aquagold International is 10.91 times more volatile than Fam Value Fund. It trades about -0.17 of its total potential returns per unit of risk. Fam Value Fund is currently generating about -0.1 per unit of volatility. If you would invest  10,599  in Fam Value Fund on December 20, 2024 and sell it today you would lose (810.00) from holding Fam Value Fund or give up 7.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Aquagold International  vs.  Fam Value Fund

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.

Fam Value Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fam Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Aquagold International and Fam Value

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

The idea behind Aquagold International and Fam Value Fund 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.