Correlation Between Aquagold International and Matthews International

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

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

Diversification Opportunities for Aquagold International and Matthews International

0.0

Correlation Coefficient

Aquagold International  Matthews International

Pay attention - limited upside

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

Pair Corralation between Aquagold International and Matthews International

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Matthews International. In addition to that, Aquagold International is 2.66 times more volatile than Matthews International. It trades about -0.03 of its total potential returns per unit of risk. Matthews International is currently generating about -0.06 per unit of volatility. If you would invest  3,348  in Matthews International on June 20, 2024 and sell it today you would lose (953.00) from holding Matthews International or give up 28.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.51%
Values	Daily Returns

Aquagold International  vs.  Matthews International

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.

Matthews International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Matthews International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Matthews International is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aquagold International and Matthews International

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

The idea behind Aquagold International and Matthews 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.