Correlation Between Aquagold International and Barclays PLC

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

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

Diversification Opportunities for Aquagold International and Barclays PLC

0.55

Correlation Coefficient

Aquagold International  Barclays PLC

Very weak diversification

The 3 months correlation between Aquagold and Barclays is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Barclays PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC ADR 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 Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC ADR has no effect on the direction of Aquagold International i.e., Aquagold International and Barclays PLC go up and down completely randomly.

Pair Corralation between Aquagold International and Barclays PLC

If you would invest  987.00  in Barclays PLC ADR on February 6, 2024 and sell it today you would earn a total of  39.00  from holding Barclays PLC ADR or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Aquagold International  vs.  Barclays PLC ADR

Aquagold International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aquagold International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Aquagold International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Barclays PLC ADR

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC ADR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Barclays PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aquagold International and Barclays PLC

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

The idea behind Aquagold International and Barclays PLC ADR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.