Correlation Between Aquagold International and Nuvve Holding

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

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

Diversification Opportunities for Aquagold International and Nuvve Holding

0.28

Correlation Coefficient

Aquagold International  Nuvve Holding

Modest diversification

The 3 months correlation between Aquagold and Nuvve is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Nuvve Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvve Holding Corp 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 Nuvve Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvve Holding Corp has no effect on the direction of Aquagold International i.e., Aquagold International and Nuvve Holding go up and down completely randomly.

Pair Corralation between Aquagold International and Nuvve Holding

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Nuvve Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 1.2 times less risky than Nuvve Holding. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Nuvve Holding Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.45  in Nuvve Holding Corp on September 28, 2024 and sell it today you would lose (0.93) from holding Nuvve Holding Corp or give up 37.96% of portfolio value over 90 days.

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

Aquagold International  vs.  Nuvve Holding Corp

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

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal technical and fundamental indicators, Nuvve Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aquagold International and Nuvve Holding

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

The idea behind Aquagold International and Nuvve Holding Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.