Correlation Between Aquagold International and International Stem

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

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

Diversification Opportunities for Aquagold International and International Stem

-0.2

Correlation Coefficient

Aquagold International  International Stem

Good diversification

The 3 months correlation between Aquagold and International is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and International Stem Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Stem Cell 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 International Stem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Stem Cell has no effect on the direction of Aquagold International i.e., Aquagold International and International Stem go up and down completely randomly.

Pair Corralation between Aquagold International and International Stem

Given the investment horizon of 90 days Aquagold International is expected to generate 2.97 times more return on investment than International Stem. However, Aquagold International is 2.97 times more volatile than International Stem Cell. It trades about 0.05 of its potential returns per unit of risk. International Stem Cell is currently generating about 0.07 per unit of risk. If you would invest  17.00  in Aquagold International on September 28, 2024 and sell it today you would lose (16.96) from holding Aquagold International or give up 99.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aquagold International  vs.  International Stem Cell

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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

International Stem Cell

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Stem Cell are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, International Stem displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and International Stem

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

The idea behind Aquagold International and International Stem Cell 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.