Correlation Between Aquagold International and STRATSSM Certificates

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Can any of the company-specific risk be diversified away by investing in both Aquagold International and STRATSSM Certificates 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 STRATSSM Certificates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and STRATSSM Certificates series, you can compare the effects of market volatilities on Aquagold International and STRATSSM Certificates 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 STRATSSM Certificates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and STRATSSM Certificates.

Diversification Opportunities for Aquagold International and STRATSSM Certificates

AquagoldSTRATSSMDiversified AwayAquagoldSTRATSSMDiversified Away100%
0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Aquagold and STRATSSM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and STRATSSM Certificates series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATSSM Certificates 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 STRATSSM Certificates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATSSM Certificates has no effect on the direction of Aquagold International i.e., Aquagold International and STRATSSM Certificates go up and down completely randomly.

Pair Corralation between Aquagold International and STRATSSM Certificates

Given the investment horizon of 90 days Aquagold International is expected to under-perform the STRATSSM Certificates. In addition to that, Aquagold International is 22.44 times more volatile than STRATSSM Certificates series. It trades about -0.13 of its total potential returns per unit of risk. STRATSSM Certificates series is currently generating about -0.03 per unit of volatility. If you would invest  2,292  in STRATSSM Certificates series on October 15, 2024 and sell it today you would lose (21.00) from holding STRATSSM Certificates series or give up 0.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.39%
ValuesDaily Returns

Aquagold International  vs.  STRATSSM Certificates series

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -80-60-40-200
JavaScript chart by amCharts 3.21.15AQUI GJS
       Timeline  
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 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.00049999999999999910.0010.0020.0030.0040.0050.006
STRATSSM Certificates 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days STRATSSM Certificates series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking indicators, STRATSSM Certificates is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan22.522.622.722.822.92323.123.2

Aquagold International and STRATSSM Certificates Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-19.43-14.55-9.67-4.80.04.248.5512.8717.18 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15AQUI GJS
       Returns  

Pair Trading with Aquagold International and STRATSSM Certificates

The main advantage of trading using opposite Aquagold International and STRATSSM Certificates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, STRATSSM Certificates 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 STRATSSM Certificates will offset losses from the drop in STRATSSM Certificates' long position.
The idea behind Aquagold International and STRATSSM Certificates series 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 Stocks Directory module to find actively traded stocks across global markets.

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