Correlation Between Aquagold International and BlackRock TCP

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

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

Diversification Opportunities for Aquagold International and BlackRock TCP

-0.23

Correlation Coefficient

Aquagold International  BlackRock TCP

Very good diversification

The 3 months correlation between Aquagold and BlackRock is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and BlackRock TCP Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock TCP Capital 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 BlackRock TCP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock TCP Capital has no effect on the direction of Aquagold International i.e., Aquagold International and BlackRock TCP go up and down completely randomly.

Pair Corralation between Aquagold International and BlackRock TCP

Given the investment horizon of 90 days Aquagold International is expected to generate 34.93 times more return on investment than BlackRock TCP. However, Aquagold International is 34.93 times more volatile than BlackRock TCP Capital. It trades about 0.05 of its potential returns per unit of risk. BlackRock TCP Capital is currently generating about -0.02 per unit of risk. If you would invest  17.00  in Aquagold International on October 13, 2024 and sell it today you would lose (16.96) from holding Aquagold International or give up 99.76% of portfolio value over 90 days.

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

Aquagold International  vs.  BlackRock TCP Capital

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.

BlackRock TCP Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock TCP Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, BlackRock TCP may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Aquagold International and BlackRock TCP

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

The idea behind Aquagold International and BlackRock TCP Capital 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.