Correlation Between Aquagold International and IShares Utilities

Can any of the company-specific risk be diversified away by investing in both Aquagold International and IShares Utilities 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 Utilities 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 Utilities ETF, you can compare the effects of market volatilities on Aquagold International and IShares Utilities 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 Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and IShares Utilities.

Diversification Opportunities for Aquagold International and IShares Utilities

0.0

Correlation Coefficient

Aquagold International  IShares Utilities

Pay attention - limited upside

The 3 months correlation between Aquagold and IShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and iShares Utilities ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Utilities 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 IShares Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Utilities ETF has no effect on the direction of Aquagold International i.e., Aquagold International and IShares Utilities go up and down completely randomly.

Pair Corralation between Aquagold International and IShares Utilities

Given the investment horizon of 90 days Aquagold International is expected to generate 51.81 times more return on investment than IShares Utilities. However, Aquagold International is 51.81 times more volatile than iShares Utilities ETF. It trades about 0.06 of its potential returns per unit of risk. iShares Utilities ETF is currently generating about 0.04 per unit of risk. If you would invest  17.00  in Aquagold International on September 20, 2024 and sell it today you would lose (16.40) from holding Aquagold International or give up 96.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aquagold International  vs.  iShares Utilities ETF

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 fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

iShares Utilities ETF

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aquagold International and IShares Utilities

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

The idea behind Aquagold International and iShares Utilities 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.