Correlation Between Aquagold International and First Citizens

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

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

Diversification Opportunities for Aquagold International and First Citizens

0.4

Correlation Coefficient

Aquagold International  First Citizens

Very weak diversification

The 3 months correlation between Aquagold and First is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and First Citizens BancShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Citizens BancShares 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 First Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Citizens BancShares has no effect on the direction of Aquagold International i.e., Aquagold International and First Citizens go up and down completely randomly.

Pair Corralation between Aquagold International and First Citizens

Given the investment horizon of 90 days Aquagold International is expected to under-perform the First Citizens. In addition to that, Aquagold International is 7.18 times more volatile than First Citizens BancShares. It trades about -0.06 of its total potential returns per unit of risk. First Citizens BancShares is currently generating about 0.08 per unit of volatility. If you would invest  1,862  in First Citizens BancShares on October 5, 2024 and sell it today you would earn a total of  444.00  from holding First Citizens BancShares or generate 23.85% 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.  First Citizens BancShares

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.

First Citizens BancShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Citizens BancShares has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, First Citizens is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Aquagold International and First Citizens

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

The idea behind Aquagold International and First Citizens BancShares 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.