Correlation Between Aquarius Engines and Pluristem

Can any of the company-specific risk be diversified away by investing in both Aquarius Engines and Pluristem 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 Pluristem 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 Pluristem, you can compare the effects of market volatilities on Aquarius Engines and Pluristem 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 Pluristem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquarius Engines and Pluristem.

Diversification Opportunities for Aquarius Engines and Pluristem

0.14

Correlation Coefficient

Aquarius Engines  Pluristem

Average diversification

The 3 months correlation between Aquarius and Pluristem is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Aquarius Engines AM and Pluristem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pluristem 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 Pluristem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pluristem has no effect on the direction of Aquarius Engines i.e., Aquarius Engines and Pluristem go up and down completely randomly.

Pair Corralation between Aquarius Engines and Pluristem

Assuming the 90 days trading horizon Aquarius Engines AM is expected to under-perform the Pluristem. But the stock apears to be less risky and, when comparing its historical volatility, Aquarius Engines AM is 5.46 times less risky than Pluristem. The stock trades about -0.02 of its potential returns per unit of risk. The Pluristem is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  36,900  in Pluristem on September 27, 2024 and sell it today you would earn a total of  128,000  from holding Pluristem or generate 346.88% return on investment over 90 days.

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

Aquarius Engines AM  vs.  Pluristem

Aquarius Engines

Risk-Adjusted Performance

0 of 100

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.

Pluristem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pluristem 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 somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Aquarius Engines and Pluristem

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

The idea behind Aquarius Engines AM and Pluristem 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.