Correlation Between Aquagold International and Medican Enterprises

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

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

Diversification Opportunities for Aquagold International and Medican Enterprises

-0.41

Correlation Coefficient

Aquagold International  Medican Enterprises

Very good diversification

The 3 months correlation between Aquagold and Medican is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Medican Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medican Enterprises 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 Medican Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medican Enterprises has no effect on the direction of Aquagold International i.e., Aquagold International and Medican Enterprises go up and down completely randomly.

Pair Corralation between Aquagold International and Medican Enterprises

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Medican Enterprises. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 44.86 times less risky than Medican Enterprises. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Medican Enterprises is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Medican Enterprises on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Medican Enterprises or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Aquagold International  vs.  Medican Enterprises

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.

Medican Enterprises

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Medican Enterprises are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Medican Enterprises displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Medican Enterprises

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

The idea behind Aquagold International and Medican Enterprises 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.