Correlation Between Aquagold International and Rand Capital

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

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

Diversification Opportunities for Aquagold International and Rand Capital

0.0

Correlation Coefficient

Aquagold International  Rand Capital

Pay attention - limited upside

The 3 months correlation between Aquagold and Rand is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Rand Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Capital 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 Rand Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Capital Corp has no effect on the direction of Aquagold International i.e., Aquagold International and Rand Capital go up and down completely randomly.

Pair Corralation between Aquagold International and Rand Capital

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Rand Capital. In addition to that, Aquagold International is 2.08 times more volatile than Rand Capital Corp. It trades about -0.03 of its total potential returns per unit of risk. Rand Capital Corp is currently generating about 0.1 per unit of volatility. If you would invest  952.00  in Rand Capital Corp on September 23, 2024 and sell it today you would earn a total of  754.00  from holding Rand Capital Corp or generate 79.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.41%
Values	Daily Returns

Aquagold International  vs.  Rand Capital 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 fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Rand Capital Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rand Capital Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Rand Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Rand Capital

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

The idea behind Aquagold International and Rand Capital 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.