Correlation Between Aquagold International and Ferrexpo PLC

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

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

Diversification Opportunities for Aquagold International and Ferrexpo PLC

-0.33

Correlation Coefficient

Aquagold International  Ferrexpo PLC

Very good diversification

The 3 months correlation between Aquagold and Ferrexpo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Aquagold International i.e., Aquagold International and Ferrexpo PLC go up and down completely randomly.

Pair Corralation between Aquagold International and Ferrexpo PLC

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Ferrexpo PLC. In addition to that, Aquagold International is 1.01 times more volatile than Ferrexpo PLC. It trades about -0.13 of its total potential returns per unit of risk. Ferrexpo PLC is currently generating about 0.16 per unit of volatility. If you would invest  62.00  in Ferrexpo PLC on October 7, 2024 and sell it today you would earn a total of  82.00  from holding Ferrexpo PLC or generate 132.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Aquagold International  vs.  Ferrexpo PLC

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.

Ferrexpo PLC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ferrexpo PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ferrexpo PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Ferrexpo PLC

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

The idea behind Aquagold International and Ferrexpo PLC 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.