Correlation Between Aquagold International and PLAIDInc

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

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

Diversification Opportunities for Aquagold International and PLAIDInc

-0.88

Correlation Coefficient

Aquagold International  PLAIDInc

Pay attention - limited upside

The 3 months correlation between Aquagold and PLAIDInc is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and PLAIDInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAIDInc 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 PLAIDInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAIDInc has no effect on the direction of Aquagold International i.e., Aquagold International and PLAIDInc go up and down completely randomly.

Pair Corralation between Aquagold International and PLAIDInc

Given the investment horizon of 90 days Aquagold International is expected to generate 29.19 times more return on investment than PLAIDInc. However, Aquagold International is 29.19 times more volatile than PLAIDInc. It trades about 0.05 of its potential returns per unit of risk. PLAIDInc is currently generating about 0.01 per unit of risk. If you would invest  25.00  in Aquagold International on October 21, 2024 and sell it today you would lose (24.96) from holding Aquagold International or give up 99.84% of portfolio value over 90 days.

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

Aquagold International  vs.  PLAIDInc

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.

PLAIDInc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLAIDInc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, PLAIDInc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and PLAIDInc

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

The idea behind Aquagold International and PLAIDInc 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.