Correlation Between LiqTech International and 374Water Common

Can any of the company-specific risk be diversified away by investing in both LiqTech International and 374Water Common 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 LiqTech International and 374Water Common into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LiqTech International and 374Water Common Stock, you can compare the effects of market volatilities on LiqTech International and 374Water Common 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 LiqTech International with a short position of 374Water Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of LiqTech International and 374Water Common.

Diversification Opportunities for LiqTech International and 374Water Common

0.29

Correlation Coefficient

LiqTech International  374Water Common

Modest diversification

The 3 months correlation between LiqTech and 374Water is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding LiqTech International and 374Water Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 374Water Common Stock and LiqTech 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 LiqTech International are associated (or correlated) with 374Water Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 374Water Common Stock has no effect on the direction of LiqTech International i.e., LiqTech International and 374Water Common go up and down completely randomly.

Pair Corralation between LiqTech International and 374Water Common

Given the investment horizon of 90 days LiqTech International is expected to generate 1.05 times more return on investment than 374Water Common. However, LiqTech International is 1.05 times more volatile than 374Water Common Stock. It trades about -0.1 of its potential returns per unit of risk. 374Water Common Stock is currently generating about -0.18 per unit of risk. If you would invest  298.00  in LiqTech International on September 19, 2024 and sell it today you would lose (115.00) from holding LiqTech International or give up 38.59% of portfolio value over 90 days.

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

LiqTech International  vs.  374Water Common Stock

LiqTech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LiqTech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

374Water Common Stock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 374Water Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with LiqTech International and 374Water Common

The main advantage of trading using opposite LiqTech International and 374Water Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LiqTech International position performs unexpectedly, 374Water Common 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 374Water Common will offset losses from the drop in 374Water Common's long position.

The idea behind LiqTech International and 374Water Common Stock 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.