Correlation Between Aquagold International and ProShares Ultra

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

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

Diversification Opportunities for Aquagold International and ProShares Ultra

0.0

Correlation Coefficient

Aquagold International  ProShares Ultra

Pay attention - limited upside

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

Pair Corralation between Aquagold International and ProShares Ultra

Given the investment horizon of 90 days Aquagold International is expected to generate 20.8 times more return on investment than ProShares Ultra. However, Aquagold International is 20.8 times more volatile than ProShares Ultra QQQ. It trades about 0.06 of its potential returns per unit of risk. ProShares Ultra QQQ is currently generating about 0.09 per unit of risk. If you would invest  26.00  in Aquagold International on July 20, 2024 and sell it today you would lose (25.40) from holding Aquagold International or give up 97.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Aquagold International  vs.  ProShares Ultra QQQ

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.

ProShares Ultra QQQ

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Ultra QQQ are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, ProShares Ultra is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aquagold International and ProShares Ultra

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

The idea behind Aquagold International and ProShares Ultra QQQ 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.