Correlation Between Aquagold International and ETRACS 2xMonthly

Can any of the company-specific risk be diversified away by investing in both Aquagold International and ETRACS 2xMonthly 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 ETRACS 2xMonthly into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aquagold International and ETRACS 2xMonthly Pay, you can compare the effects of market volatilities on Aquagold International and ETRACS 2xMonthly 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 ETRACS 2xMonthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and ETRACS 2xMonthly.

Diversification Opportunities for Aquagold International and ETRACS 2xMonthly

0.11

Correlation Coefficient

Aquagold International  ETRACS 2xMonthly

Average diversification

The 3 months correlation between Aquagold and ETRACS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and ETRACS 2xMonthly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS 2xMonthly Pay 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 ETRACS 2xMonthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS 2xMonthly Pay has no effect on the direction of Aquagold International i.e., Aquagold International and ETRACS 2xMonthly go up and down completely randomly.

Pair Corralation between Aquagold International and ETRACS 2xMonthly

Given the investment horizon of 90 days Aquagold International is expected to under-perform the ETRACS 2xMonthly. In addition to that, Aquagold International is 4.09 times more volatile than ETRACS 2xMonthly Pay. It trades about -0.12 of its total potential returns per unit of risk. ETRACS 2xMonthly Pay is currently generating about -0.02 per unit of volatility. If you would invest  890.00  in ETRACS 2xMonthly Pay on December 29, 2024 and sell it today you would lose (20.00) from holding ETRACS 2xMonthly Pay or give up 2.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Aquagold International  vs.  ETRACS 2xMonthly Pay

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.

ETRACS 2xMonthly Pay

Risk-Adjusted Performance

Very Weak

Over the last 90 days ETRACS 2xMonthly Pay has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, ETRACS 2xMonthly is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Aquagold International and ETRACS 2xMonthly

The main advantage of trading using opposite Aquagold International and ETRACS 2xMonthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, ETRACS 2xMonthly 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 ETRACS 2xMonthly will offset losses from the drop in ETRACS 2xMonthly's long position.

The idea behind Aquagold International and ETRACS 2xMonthly Pay 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.