Correlation Between Aquagold International and IDT

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

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

Diversification Opportunities for Aquagold International and IDT

-0.02

Correlation Coefficient

Aquagold International  IDT

Good diversification

The 3 months correlation between Aquagold and IDT is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and IDT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDT Corporation 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 IDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDT Corporation has no effect on the direction of Aquagold International i.e., Aquagold International and IDT go up and down completely randomly.

Pair Corralation between Aquagold International and IDT

Given the investment horizon of 90 days Aquagold International is expected to generate 24.07 times more return on investment than IDT. However, Aquagold International is 24.07 times more volatile than IDT Corporation. It trades about 0.05 of its potential returns per unit of risk. IDT Corporation is currently generating about 0.07 per unit of risk. If you would invest  17.00  in Aquagold International on September 29, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aquagold International  vs.  IDT Corp.

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

IDT Corporation

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IDT Corporation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental indicators, IDT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and IDT

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

The idea behind Aquagold International and IDT Corporation 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.