Correlation Between Aquagold International and Fidelity Municipal

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

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

Diversification Opportunities for Aquagold International and Fidelity Municipal

0.0

Correlation Coefficient

Aquagold International  Fidelity Municipal

Pay attention - limited upside

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

Pair Corralation between Aquagold International and Fidelity Municipal

Given the investment horizon of 90 days Aquagold International is expected to generate 206.53 times more return on investment than Fidelity Municipal. However, Aquagold International is 206.53 times more volatile than Fidelity Municipal Income. It trades about 0.06 of its potential returns per unit of risk. Fidelity Municipal Income is currently generating about 0.07 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	99.8%
Values	Daily Returns

Aquagold International  vs.  Fidelity Municipal Income

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.

Fidelity Municipal Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Municipal Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Fidelity Municipal 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 Fidelity Municipal

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

The idea behind Aquagold International and Fidelity Municipal Income 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..