Correlation Between Aquagold International and Nationwide Highmark

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

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

Diversification Opportunities for Aquagold International and Nationwide Highmark

0.84

Correlation Coefficient

Aquagold International  Nationwide Highmark

Very poor diversification

The 3 months correlation between Aquagold and Nationwide is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Nationwide Highmark Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Highmark Small 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 Nationwide Highmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Highmark Small has no effect on the direction of Aquagold International i.e., Aquagold International and Nationwide Highmark go up and down completely randomly.

Pair Corralation between Aquagold International and Nationwide Highmark

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Nationwide Highmark. In addition to that, Aquagold International is 6.23 times more volatile than Nationwide Highmark Small. It trades about -0.12 of its total potential returns per unit of risk. Nationwide Highmark Small is currently generating about -0.18 per unit of volatility. If you would invest  2,878  in Nationwide Highmark Small on December 30, 2024 and sell it today you would lose (303.00) from holding Nationwide Highmark Small or give up 10.53% of portfolio value over 90 days.

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

Aquagold International  vs.  Nationwide Highmark Small

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.

Nationwide Highmark Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Highmark Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Aquagold International and Nationwide Highmark

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

The idea behind Aquagold International and Nationwide Highmark Small 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 Stocks Directory module to find actively traded stocks across global markets.