Correlation Between Aquagold International and Vanguard Wellesley

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

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

Diversification Opportunities for Aquagold International and Vanguard Wellesley

0.72

Correlation Coefficient

Aquagold International  Vanguard Wellesley

Poor diversification

The 3 months correlation between Aquagold and Vanguard is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Vanguard Wellesley Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Wellesley Income 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 Vanguard Wellesley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Wellesley Income has no effect on the direction of Aquagold International i.e., Aquagold International and Vanguard Wellesley go up and down completely randomly.

Pair Corralation between Aquagold International and Vanguard Wellesley

If you would invest  2,474  in Vanguard Wellesley Income on October 23, 2024 and sell it today you would earn a total of  33.00  from holding Vanguard Wellesley Income or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Aquagold International  vs.  Vanguard Wellesley Income

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.

Vanguard Wellesley Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Wellesley Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vanguard Wellesley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Vanguard Wellesley

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

The idea behind Aquagold International and Vanguard Wellesley Income 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.