Correlation Between Aquagold International and IShares Financials
Can any of the company-specific risk be diversified away by investing in both Aquagold International and IShares Financials 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 Financials 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 Financials ETF, you can compare the effects of market volatilities on Aquagold International and IShares Financials 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 Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and IShares Financials.
Diversification Opportunities for Aquagold International and IShares Financials
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aquagold and IShares is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and iShares Financials ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Financials 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 Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Financials ETF has no effect on the direction of Aquagold International i.e., Aquagold International and IShares Financials go up and down completely randomly.
Pair Corralation between Aquagold International and IShares Financials
Given the investment horizon of 90 days Aquagold International is expected to under-perform the IShares Financials. In addition to that, Aquagold International is 7.41 times more volatile than iShares Financials ETF. It trades about -0.07 of its total potential returns per unit of risk. iShares Financials ETF is currently generating about 0.13 per unit of volatility. If you would invest 7,516 in iShares Financials ETF on December 2, 2024 and sell it today you would earn a total of 4,324 from holding iShares Financials ETF or generate 57.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.2% |
Values | Daily Returns |
Aquagold International vs. iShares Financials ETF
Performance |
Timeline |
Aquagold International |
iShares Financials ETF |
Aquagold International and IShares Financials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aquagold International and IShares Financials
The main advantage of trading using opposite Aquagold International and IShares Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, IShares Financials 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 Financials will offset losses from the drop in IShares Financials' long position.Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
IShares Financials vs. iShares Financial Services | IShares Financials vs. iShares Industrials ETF | IShares Financials vs. iShares Consumer Discretionary | IShares Financials vs. iShares Healthcare ETF |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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