Correlation Between Aquagold International and Groupon

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

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

Diversification Opportunities for Aquagold International and Groupon

-0.14

Correlation Coefficient

Aquagold International  Groupon

Good diversification

The 3 months correlation between Aquagold and Groupon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Groupon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupon 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 Groupon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupon has no effect on the direction of Aquagold International i.e., Aquagold International and Groupon go up and down completely randomly.

Pair Corralation between Aquagold International and Groupon

Given the investment horizon of 90 days Aquagold International is expected to generate 7.94 times more return on investment than Groupon. However, Aquagold International is 7.94 times more volatile than Groupon. It trades about 0.05 of its potential returns per unit of risk. Groupon is currently generating about 0.08 per unit of risk. If you would invest  0.10  in Aquagold International on December 27, 2024 and sell it today you would lose (0.08) from holding Aquagold International or give up 80.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Aquagold International  vs.  Groupon

Aquagold International

Risk-Adjusted Performance

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 April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Groupon

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groupon are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Groupon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Groupon

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

The idea behind Aquagold International and Groupon 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..