Correlation Between Aquarius Engines and GP Global

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

By analyzing existing cross correlation between Aquarius Engines AM and GP Global Power, you can compare the effects of market volatilities on Aquarius Engines and GP Global 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 Aquarius Engines with a short position of GP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquarius Engines and GP Global.

Diversification Opportunities for Aquarius Engines and GP Global

0.0

Correlation Coefficient

Aquarius Engines  GP Global

Pay attention - limited upside

The 3 months correlation between Aquarius and GPGB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquarius Engines AM and GP Global Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Global Power and Aquarius Engines 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 Aquarius Engines AM are associated (or correlated) with GP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Global Power has no effect on the direction of Aquarius Engines i.e., Aquarius Engines and GP Global go up and down completely randomly.

Pair Corralation between Aquarius Engines and GP Global

Assuming the 90 days trading horizon Aquarius Engines AM is expected to under-perform the GP Global. In addition to that, Aquarius Engines is 3.94 times more volatile than GP Global Power. It trades about -0.02 of its total potential returns per unit of risk. GP Global Power is currently generating about 0.02 per unit of volatility. If you would invest  156,200  in GP Global Power on September 27, 2024 and sell it today you would earn a total of  7,000  from holding GP Global Power or generate 4.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.73%
Values	Daily Returns

Aquarius Engines AM  vs.  GP Global Power

Aquarius Engines

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Aquarius Engines AM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Aquarius Engines is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GP Global Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GP Global Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GP Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquarius Engines and GP Global

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

The idea behind Aquarius Engines AM and GP Global Power 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.