Correlation Between Aquagold International and Clearbridge International

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

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

Diversification Opportunities for Aquagold International and Clearbridge International

0.07

Correlation Coefficient

Aquagold International  Clearbridge International

Significant diversification

The 3 months correlation between Aquagold and Clearbridge is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Clearbridge International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge International 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 Clearbridge International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge International has no effect on the direction of Aquagold International i.e., Aquagold International and Clearbridge International go up and down completely randomly.

Pair Corralation between Aquagold International and Clearbridge International

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Clearbridge International. In addition to that, Aquagold International is 6.36 times more volatile than Clearbridge International Growth. It trades about -0.13 of its total potential returns per unit of risk. Clearbridge International Growth is currently generating about 0.1 per unit of volatility. If you would invest  5,999  in Clearbridge International Growth on December 24, 2024 and sell it today you would earn a total of  352.00  from holding Clearbridge International Growth or generate 5.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Aquagold International  vs.  Clearbridge International Grow

Aquagold International

Risk-Adjusted Performance

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

Clearbridge International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge International Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Clearbridge International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Clearbridge International

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

The idea behind Aquagold International and Clearbridge International Growth 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.