Correlation Between TRADEDOUBLER and Aqua America

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

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

Diversification Opportunities for TRADEDOUBLER and Aqua America

-0.55

Correlation Coefficient

TRADEDOUBLER  Aqua America

Excellent diversification

The 3 months correlation between TRADEDOUBLER and Aqua is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK and Aqua America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua America and TRADEDOUBLER 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 TRADEDOUBLER AB SK are associated (or correlated) with Aqua America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua America has no effect on the direction of TRADEDOUBLER i.e., TRADEDOUBLER and Aqua America go up and down completely randomly.

Pair Corralation between TRADEDOUBLER and Aqua America

Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to generate 2.25 times more return on investment than Aqua America. However, TRADEDOUBLER is 2.25 times more volatile than Aqua America. It trades about 0.03 of its potential returns per unit of risk. Aqua America is currently generating about -0.11 per unit of risk. If you would invest  27.00  in TRADEDOUBLER AB SK on October 25, 2024 and sell it today you would earn a total of  1.00  from holding TRADEDOUBLER AB SK or generate 3.7% return on investment over 90 days.

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

TRADEDOUBLER AB SK  vs.  Aqua America

TRADEDOUBLER AB SK

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aqua America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqua America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with TRADEDOUBLER and Aqua America

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

The idea behind TRADEDOUBLER AB SK and Aqua America 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.