Correlation Between Evergreen Warrant and Aquagold International

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

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

Diversification Opportunities for Evergreen Warrant and Aquagold International

0.14

Correlation Coefficient

Evergreen Warrant  Aquagold International

Average diversification

The 3 months correlation between Evergreen and Aquagold is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen Warrant and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Evergreen Warrant 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 Evergreen Warrant are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Evergreen Warrant i.e., Evergreen Warrant and Aquagold International go up and down completely randomly.

Pair Corralation between Evergreen Warrant and Aquagold International

Assuming the 90 days horizon Evergreen Warrant is expected to generate 1.95 times more return on investment than Aquagold International. However, Evergreen Warrant is 1.95 times more volatile than Aquagold International. It trades about 0.12 of its potential returns per unit of risk. Aquagold International is currently generating about 0.07 per unit of risk. If you would invest  5.90  in Evergreen Warrant on February 11, 2024 and sell it today you would earn a total of  3.18  from holding Evergreen Warrant or generate 53.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	43.62%
Values	Daily Returns

Evergreen Warrant  vs.  Aquagold International

Evergreen Warrant

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen Warrant are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Evergreen Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

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 fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Evergreen Warrant and Aquagold International

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

The idea behind Evergreen Warrant and Aquagold International 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.