Correlation Between Aquagold International and Federal Home

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

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

Diversification Opportunities for Aquagold International and Federal Home

0.0

Correlation Coefficient

Aquagold International  Federal Home

Pay attention - limited upside

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

Pair Corralation between Aquagold International and Federal Home

If you would invest  111.00  in Federal Home Loan on September 5, 2024 and sell it today you would earn a total of  119.00  from holding Federal Home Loan or generate 107.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aquagold International  vs.  Federal Home Loan

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 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.

Federal Home Loan

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federal Home Loan are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Federal Home exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Federal Home

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

The idea behind Aquagold International and Federal Home Loan 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.