Correlation Between Aquagold International and OceanFirst Financial

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

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

Diversification Opportunities for Aquagold International and OceanFirst Financial

-0.29

Correlation Coefficient

Aquagold International  OceanFirst Financial

Very good diversification

The 3 months correlation between Aquagold and OceanFirst is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and OceanFirst Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OceanFirst Financial 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 OceanFirst Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OceanFirst Financial Corp has no effect on the direction of Aquagold International i.e., Aquagold International and OceanFirst Financial go up and down completely randomly.

Pair Corralation between Aquagold International and OceanFirst Financial

Given the investment horizon of 90 days Aquagold International is expected to under-perform the OceanFirst Financial. In addition to that, Aquagold International is 67.45 times more volatile than OceanFirst Financial Corp. It trades about -0.22 of its total potential returns per unit of risk. OceanFirst Financial Corp is currently generating about -0.01 per unit of volatility. If you would invest  2,517  in OceanFirst Financial Corp on October 5, 2024 and sell it today you would lose (2.00) from holding OceanFirst Financial Corp or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aquagold International  vs.  OceanFirst Financial 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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

OceanFirst Financial Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OceanFirst Financial Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, OceanFirst Financial is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Aquagold International and OceanFirst Financial

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

The idea behind Aquagold International and OceanFirst Financial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.