Correlation Between Aquagold International and North European

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

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

Diversification Opportunities for Aquagold International and North European

0.32

Correlation Coefficient

Aquagold International  North European

Weak diversification

The 3 months correlation between Aquagold and North is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and North European Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North European Oil 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 North European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North European Oil has no effect on the direction of Aquagold International i.e., Aquagold International and North European go up and down completely randomly.

Pair Corralation between Aquagold International and North European

Given the investment horizon of 90 days Aquagold International is expected to under-perform the North European. In addition to that, Aquagold International is 2.34 times more volatile than North European Oil. It trades about -0.06 of its total potential returns per unit of risk. North European Oil is currently generating about -0.02 per unit of volatility. If you would invest  607.00  in North European Oil on October 5, 2024 and sell it today you would lose (156.00) from holding North European Oil or give up 25.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Aquagold International  vs.  North European Oil

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.

North European Oil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days North European Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aquagold International and North European

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

The idea behind Aquagold International and North European Oil 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 CEOs Directory module to screen CEOs from public companies around the world.