Correlation Between NaturalShrimp and AquaBounty Technologies

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

By analyzing existing cross correlation between NaturalShrimp and AquaBounty Technologies, you can compare the effects of market volatilities on NaturalShrimp and AquaBounty Technologies 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 NaturalShrimp with a short position of AquaBounty Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NaturalShrimp and AquaBounty Technologies.

Diversification Opportunities for NaturalShrimp and AquaBounty Technologies

0.31

Correlation Coefficient

NaturalShrimp  AquaBounty Technologies

Weak diversification

The 3 months correlation between NaturalShrimp and AquaBounty is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding NaturalShrimp and AquaBounty Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AquaBounty Technologies and NaturalShrimp 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 NaturalShrimp are associated (or correlated) with AquaBounty Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AquaBounty Technologies has no effect on the direction of NaturalShrimp i.e., NaturalShrimp and AquaBounty Technologies go up and down completely randomly.

Pair Corralation between NaturalShrimp and AquaBounty Technologies

Given the investment horizon of 90 days NaturalShrimp is expected to generate 2.1 times more return on investment than AquaBounty Technologies. However, NaturalShrimp is 2.1 times more volatile than AquaBounty Technologies. It trades about 0.0 of its potential returns per unit of risk. AquaBounty Technologies is currently generating about -0.13 per unit of risk. If you would invest  0.89  in NaturalShrimp on September 17, 2024 and sell it today you would lose (0.49) from holding NaturalShrimp or give up 55.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

NaturalShrimp  vs.  AquaBounty Technologies

NaturalShrimp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NaturalShrimp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, NaturalShrimp reported solid returns over the last few months and may actually be approaching a breakup point.

AquaBounty Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AquaBounty Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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 NaturalShrimp and AquaBounty Technologies

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

The idea behind NaturalShrimp and AquaBounty Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.