Correlation Between Aquagold International and Vanguard Industrials

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

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

Diversification Opportunities for Aquagold International and Vanguard Industrials

0.0

Correlation Coefficient

Aquagold International  Vanguard Industrials

Pay attention - limited upside

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

Pair Corralation between Aquagold International and Vanguard Industrials

If you would invest  12,613  in Vanguard Industrials Index on August 31, 2024 and sell it today you would earn a total of  1,722  from holding Vanguard Industrials Index or generate 13.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Aquagold International  vs.  Vanguard Industrials Index

Aquagold International

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Vanguard Industrials

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Industrials Index are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Industrials showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Vanguard Industrials

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

The idea behind Aquagold International and Vanguard Industrials Index 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.