Correlation Between Expeditors International and Aquagold International

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

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

Diversification Opportunities for Expeditors International and Aquagold International

-0.64

Correlation Coefficient

Expeditors International  Aquagold International

Excellent diversification

The 3 months correlation between Expeditors and Aquagold is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Expeditors International of and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Expeditors 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 Expeditors International of are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Expeditors International i.e., Expeditors International and Aquagold International go up and down completely randomly.

Pair Corralation between Expeditors International and Aquagold International

Given the investment horizon of 90 days Expeditors International is expected to generate 153.22 times less return on investment than Aquagold International. But when comparing it to its historical volatility, Expeditors International of is 44.1 times less risky than Aquagold International. It trades about 0.02 of its potential returns per unit of risk. Aquagold International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Aquagold International on January 31, 2024 and sell it today you would lose (16.40) from holding Aquagold International or give up 96.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Expeditors International of  vs.  Aquagold International

Expeditors International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expeditors International of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Expeditors International and Aquagold International

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

The idea behind Expeditors International of and Aquagold 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.

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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.