Correlation Between Aquagold International and RESAAS Services

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Can any of the company-specific risk be diversified away by investing in both Aquagold International and RESAAS Services 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 RESAAS Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and RESAAS Services, you can compare the effects of market volatilities on Aquagold International and RESAAS Services 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 RESAAS Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and RESAAS Services.

Diversification Opportunities for Aquagold International and RESAAS Services

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Aquagold and RESAAS is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and RESAAS Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RESAAS Services 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 RESAAS Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RESAAS Services has no effect on the direction of Aquagold International i.e., Aquagold International and RESAAS Services go up and down completely randomly.

Pair Corralation between Aquagold International and RESAAS Services

Given the investment horizon of 90 days Aquagold International is expected to under-perform the RESAAS Services. In addition to that, Aquagold International is 1.25 times more volatile than RESAAS Services. It trades about -0.12 of its total potential returns per unit of risk. RESAAS Services is currently generating about 0.01 per unit of volatility. If you would invest  21.00  in RESAAS Services on September 30, 2024 and sell it today you would lose (4.00) from holding RESAAS Services or give up 19.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Aquagold International  vs.  RESAAS Services

 Performance 
       Timeline  
Aquagold International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
RESAAS Services 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days RESAAS Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, RESAAS Services may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aquagold International and RESAAS Services Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aquagold International and RESAAS Services

The main advantage of trading using opposite Aquagold International and RESAAS Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, RESAAS Services 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 RESAAS Services will offset losses from the drop in RESAAS Services' long position.
The idea behind Aquagold International and RESAAS Services 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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