Correlation Between Aquagold International and Pimco Stocksplus

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

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

Diversification Opportunities for Aquagold International and Pimco Stocksplus

-0.3

Correlation Coefficient

Aquagold International  Pimco Stocksplus

Very good diversification

The 3 months correlation between Aquagold and Pimco is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Pimco Stocksplus Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Stocksplus Short 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 Pimco Stocksplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Stocksplus Short has no effect on the direction of Aquagold International i.e., Aquagold International and Pimco Stocksplus go up and down completely randomly.

Pair Corralation between Aquagold International and Pimco Stocksplus

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Pimco Stocksplus. In addition to that, Aquagold International is 6.24 times more volatile than Pimco Stocksplus Short. It trades about -0.13 of its total potential returns per unit of risk. Pimco Stocksplus Short is currently generating about 0.14 per unit of volatility. If you would invest  695.00  in Pimco Stocksplus Short on December 21, 2024 and sell it today you would earn a total of  57.00  from holding Pimco Stocksplus Short or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Aquagold International  vs.  Pimco Stocksplus Short

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.

Pimco Stocksplus Short

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Stocksplus Short are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pimco Stocksplus may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Aquagold International and Pimco Stocksplus

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

The idea behind Aquagold International and Pimco Stocksplus Short 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.