Correlation Between Aquagold International and Alpha Star

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

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

Diversification Opportunities for Aquagold International and Alpha Star

0.0

Correlation Coefficient

Aquagold International  Alpha Star

Pay attention - limited upside

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

Pair Corralation between Aquagold International and Alpha Star

Given the investment horizon of 90 days Aquagold International is expected to generate 45.02 times more return on investment than Alpha Star. However, Aquagold International is 45.02 times more volatile than Alpha Star Acquisition. It trades about 0.06 of its potential returns per unit of risk. Alpha Star Acquisition is currently generating about 0.03 per unit of risk. If you would invest  25.00  in Aquagold International on September 4, 2024 and sell it today you would lose (24.40) from holding Aquagold International or give up 97.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	91.7%
Values	Daily Returns

Aquagold International  vs.  Alpha Star Acquisition

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Alpha Star Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Star Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aquagold International and Alpha Star

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

The idea behind Aquagold International and Alpha Star Acquisition 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.