Correlation Between Aquagold International and Wirecard

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

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

Diversification Opportunities for Aquagold International and Wirecard

-0.12

Correlation Coefficient

Aquagold International  Wirecard

Good diversification

The 3 months correlation between Aquagold and Wirecard is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Wirecard AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wirecard AG 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 Wirecard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wirecard AG has no effect on the direction of Aquagold International i.e., Aquagold International and Wirecard go up and down completely randomly.

Pair Corralation between Aquagold International and Wirecard

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Wirecard. But the pink sheet apears to be less risky and, when comparing its historical volatility, Aquagold International is 15.03 times less risky than Wirecard. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Wirecard AG is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Wirecard AG on October 21, 2024 and sell it today you would earn a total of  0.00  from holding Wirecard AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Aquagold International  vs.  Wirecard AG

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.

Wirecard AG

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wirecard AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Wirecard reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Wirecard

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

The idea behind Aquagold International and Wirecard AG 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.