Correlation Between WIIK Public and Aqua Public

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

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

Diversification Opportunities for WIIK Public and Aqua Public

0.11

Correlation Coefficient

WIIK Public  Aqua Public

Average diversification

The 3 months correlation between WIIK and Aqua is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding WIIK Public and Aqua Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua Public and WIIK Public 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 WIIK Public are associated (or correlated) with Aqua Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua Public has no effect on the direction of WIIK Public i.e., WIIK Public and Aqua Public go up and down completely randomly.

Pair Corralation between WIIK Public and Aqua Public

Assuming the 90 days trading horizon WIIK Public is expected to generate 0.79 times more return on investment than Aqua Public. However, WIIK Public is 1.27 times less risky than Aqua Public. It trades about 0.09 of its potential returns per unit of risk. Aqua Public is currently generating about -0.03 per unit of risk. If you would invest  102.00  in WIIK Public on September 5, 2024 and sell it today you would earn a total of  11.00  from holding WIIK Public or generate 10.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

WIIK Public  vs.  Aqua Public

WIIK Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WIIK Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, WIIK Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Aqua Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aqua Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Aqua Public is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with WIIK Public and Aqua Public

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

The idea behind WIIK Public and Aqua Public 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.