Correlation Between Secure Energy and Aqua Metals

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

By analyzing existing cross correlation between Secure Energy Services and Aqua Metals, you can compare the effects of market volatilities on Secure Energy and Aqua Metals 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 Secure Energy with a short position of Aqua Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Energy and Aqua Metals.

Diversification Opportunities for Secure Energy and Aqua Metals

-0.93

Correlation Coefficient

Secure Energy  Aqua Metals

Pay attention - limited upside

The 3 months correlation between Secure and Aqua is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Secure Energy Services and Aqua Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Metals and Secure Energy 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 Secure Energy Services are associated (or correlated) with Aqua Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Metals has no effect on the direction of Secure Energy i.e., Secure Energy and Aqua Metals go up and down completely randomly.

Pair Corralation between Secure Energy and Aqua Metals

Assuming the 90 days horizon Secure Energy Services is expected to generate 0.49 times more return on investment than Aqua Metals. However, Secure Energy Services is 2.04 times less risky than Aqua Metals. It trades about 0.08 of its potential returns per unit of risk. Aqua Metals is currently generating about -0.04 per unit of risk. If you would invest  472.00  in Secure Energy Services on September 17, 2024 and sell it today you would earn a total of  679.00  from holding Secure Energy Services or generate 143.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.79%
Values	Daily Returns

Secure Energy Services  vs.  Aqua Metals

Secure Energy Services

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Energy Services are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Secure Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Aqua Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Secure Energy and Aqua Metals

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

The idea behind Secure Energy Services and Aqua Metals 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..