Correlation Between Aquagold International and Blackrock Muniholdings

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

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

Diversification Opportunities for Aquagold International and Blackrock Muniholdings

-0.31

Correlation Coefficient

Aquagold International  Blackrock Muniholdings

Very good diversification

The 3 months correlation between Aquagold and Blackrock is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Blackrock Muniholdings Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Aquagold International i.e., Aquagold International and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Aquagold International and Blackrock Muniholdings

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Blackrock Muniholdings. In addition to that, Aquagold International is 9.0 times more volatile than Blackrock Muniholdings Quality. It trades about -0.12 of its total potential returns per unit of risk. Blackrock Muniholdings Quality is currently generating about 0.05 per unit of volatility. If you would invest  981.00  in Blackrock Muniholdings Quality on December 30, 2024 and sell it today you would earn a total of  19.00  from holding Blackrock Muniholdings Quality or generate 1.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Aquagold International  vs.  Blackrock Muniholdings Quality

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.

Blackrock Muniholdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock Muniholdings Quality are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Blackrock Muniholdings is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aquagold International and Blackrock Muniholdings

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

The idea behind Aquagold International and Blackrock Muniholdings Quality 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.