Correlation Between Aquagold International and VanEck Robotics

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

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

Diversification Opportunities for Aquagold International and VanEck Robotics

0.35

Correlation Coefficient

Aquagold International  VanEck Robotics

Weak diversification

The 3 months correlation between Aquagold and VanEck is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and VanEck Robotics ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Robotics ETF 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 VanEck Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Robotics ETF has no effect on the direction of Aquagold International i.e., Aquagold International and VanEck Robotics go up and down completely randomly.

Pair Corralation between Aquagold International and VanEck Robotics

Given the investment horizon of 90 days Aquagold International is expected to generate 42.07 times more return on investment than VanEck Robotics. However, Aquagold International is 42.07 times more volatile than VanEck Robotics ETF. It trades about 0.05 of its potential returns per unit of risk. VanEck Robotics ETF is currently generating about 0.05 per unit of risk. If you would invest  17.00  in Aquagold International on October 10, 2024 and sell it today you would lose (16.96) from holding Aquagold International or give up 99.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.09%
Values	Daily Returns

Aquagold International  vs.  VanEck Robotics ETF

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.

VanEck Robotics ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Robotics ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck Robotics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aquagold International and VanEck Robotics

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

The idea behind Aquagold International and VanEck Robotics ETF 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.