Correlation Between Aquagold International and Thunder Bridge

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

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

Diversification Opportunities for Aquagold International and Thunder Bridge

-0.25

Correlation Coefficient

Aquagold International  Thunder Bridge

Very good diversification

The 3 months correlation between Aquagold and Thunder is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Thunder Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Bridge 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 Thunder Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Bridge Capital has no effect on the direction of Aquagold International i.e., Aquagold International and Thunder Bridge go up and down completely randomly.

Pair Corralation between Aquagold International and Thunder Bridge

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Thunder Bridge. In addition to that, Aquagold International is 2.52 times more volatile than Thunder Bridge Capital. It trades about -0.22 of its total potential returns per unit of risk. Thunder Bridge Capital is currently generating about 0.14 per unit of volatility. If you would invest  1,119  in Thunder Bridge Capital on September 25, 2024 and sell it today you would earn a total of  123.00  from holding Thunder Bridge Capital or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	61.9%
Values	Daily Returns

Aquagold International  vs.  Thunder Bridge 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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Thunder Bridge Capital

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Thunder Bridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively inconsistent basic indicators, Thunder Bridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Thunder Bridge

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

The idea behind Aquagold International and Thunder Bridge 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.