Correlation Between Aquagold International and SPDR SSGA

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

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

Diversification Opportunities for Aquagold International and SPDR SSGA

0.0

Correlation Coefficient

Aquagold International  SPDR SSGA

Pay attention - limited upside

The 3 months correlation between Aquagold and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and SPDR SSGA Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Fixed 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 SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Fixed has no effect on the direction of Aquagold International i.e., Aquagold International and SPDR SSGA go up and down completely randomly.

Pair Corralation between Aquagold International and SPDR SSGA

Given the investment horizon of 90 days Aquagold International is expected to generate 115.86 times more return on investment than SPDR SSGA. However, Aquagold International is 115.86 times more volatile than SPDR SSGA Fixed. It trades about 0.06 of its potential returns per unit of risk. SPDR SSGA Fixed is currently generating about 0.03 per unit of risk. If you would invest  17.00  in Aquagold International on September 22, 2024 and sell it today you would lose (16.40) from holding Aquagold International or give up 96.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aquagold International  vs.  SPDR SSGA Fixed

Aquagold International

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

SPDR SSGA Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aquagold International and SPDR SSGA

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

The idea behind Aquagold International and SPDR SSGA Fixed 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.