Correlation Between Aquagold International and Sharps Technology

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

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

Diversification Opportunities for Aquagold International and Sharps Technology

0.38

Correlation Coefficient

Aquagold International  Sharps Technology

Weak diversification

The 3 months correlation between Aquagold and Sharps is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Sharps Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharps Technology 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 Sharps Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharps Technology has no effect on the direction of Aquagold International i.e., Aquagold International and Sharps Technology go up and down completely randomly.

Pair Corralation between Aquagold International and Sharps Technology

Given the investment horizon of 90 days Aquagold International is expected to generate 0.4 times more return on investment than Sharps Technology. However, Aquagold International is 2.5 times less risky than Sharps Technology. It trades about -0.13 of its potential returns per unit of risk. Sharps Technology is currently generating about -0.13 per unit of risk. If you would invest  0.04  in Aquagold International on December 22, 2024 and sell it today you would lose (0.02) from holding Aquagold International or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Aquagold International  vs.  Sharps Technology

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.

Sharps Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sharps Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Aquagold International and Sharps Technology

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

The idea behind Aquagold International and Sharps Technology 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.