Correlation Between Aquagold International and IShares Core

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

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

Diversification Opportunities for Aquagold International and IShares Core

0.7

Correlation Coefficient

Aquagold International  IShares Core

Poor diversification

The 3 months correlation between Aquagold and IShares is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and iShares Core High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core High 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core High has no effect on the direction of Aquagold International i.e., Aquagold International and IShares Core go up and down completely randomly.

Pair Corralation between Aquagold International and IShares Core

Given the investment horizon of 90 days Aquagold International is expected to under-perform the IShares Core. In addition to that, Aquagold International is 27.3 times more volatile than iShares Core High. It trades about -0.22 of its total potential returns per unit of risk. iShares Core High is currently generating about -0.27 per unit of volatility. If you would invest  11,538  in iShares Core High on October 13, 2024 and sell it today you would lose (452.00) from holding iShares Core High or give up 3.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Aquagold International  vs.  iShares Core High

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.

iShares Core High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Core High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Aquagold International and IShares Core

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

The idea behind Aquagold International and iShares Core High 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.