Correlation Between Aquagold International and OncoVista Innovative

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

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

Diversification Opportunities for Aquagold International and OncoVista Innovative

-0.58

Correlation Coefficient

Aquagold International  OncoVista Innovative

Excellent diversification

The 3 months correlation between Aquagold and OncoVista is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and OncoVista Innovative Therapies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OncoVista Innovative 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 OncoVista Innovative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OncoVista Innovative has no effect on the direction of Aquagold International i.e., Aquagold International and OncoVista Innovative go up and down completely randomly.

Pair Corralation between Aquagold International and OncoVista Innovative

Given the investment horizon of 90 days Aquagold International is expected to under-perform the OncoVista Innovative. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 1.05 times less risky than OncoVista Innovative. The pink sheet trades about -0.13 of its potential returns per unit of risk. The OncoVista Innovative Therapies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in OncoVista Innovative Therapies on October 9, 2024 and sell it today you would earn a total of  0.01  from holding OncoVista Innovative Therapies or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Aquagold International  vs.  OncoVista Innovative Therapies

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.

OncoVista Innovative

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OncoVista Innovative Therapies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward indicators, OncoVista Innovative unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and OncoVista Innovative

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

The idea behind Aquagold International and OncoVista Innovative Therapies 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.