Correlation Between Aquagold International and Kinetics Market

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

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

Diversification Opportunities for Aquagold International and Kinetics Market

0.02

Correlation Coefficient

Aquagold International  Kinetics Market

Significant diversification

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

Pair Corralation between Aquagold International and Kinetics Market

Given the investment horizon of 90 days Aquagold International is expected to generate 32.43 times more return on investment than Kinetics Market. However, Aquagold International is 32.43 times more volatile than Kinetics Market Opportunities. It trades about 0.06 of its potential returns per unit of risk. Kinetics Market Opportunities is currently generating about 0.09 per unit of risk. If you would invest  12.00  in Aquagold International on October 5, 2024 and sell it today you would lose (11.96) from holding Aquagold International or give up 99.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aquagold International  vs.  Kinetics Market Opportunities

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.

Kinetics Market Oppo

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetics Market Opportunities are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kinetics Market showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Kinetics Market

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

The idea behind Aquagold International and Kinetics Market Opportunities 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.