Correlation Between SW Seed and AquaBounty Technologies

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

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

Diversification Opportunities for SW Seed and AquaBounty Technologies

0.38

Correlation Coefficient

SW Seed  AquaBounty Technologies

Weak diversification

The 3 months correlation between SANW and AquaBounty is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SW Seed Company and AquaBounty Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AquaBounty Technologies and SW Seed 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 SW Seed Company are associated (or correlated) with AquaBounty Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AquaBounty Technologies has no effect on the direction of SW Seed i.e., SW Seed and AquaBounty Technologies go up and down completely randomly.

Pair Corralation between SW Seed and AquaBounty Technologies

Given the investment horizon of 90 days SW Seed Company is expected to under-perform the AquaBounty Technologies. In addition to that, SW Seed is 2.61 times more volatile than AquaBounty Technologies. It trades about -0.23 of its total potential returns per unit of risk. AquaBounty Technologies is currently generating about 0.02 per unit of volatility. If you would invest  73.00  in AquaBounty Technologies on May 7, 2025 and sell it today you would earn a total of  0.00  from holding AquaBounty Technologies or generate 0.0% return on investment over 90 days.

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

SW Seed Company  vs.  AquaBounty Technologies

SW Seed Company

Risk-Adjusted Performance

Weakest

Over the last 90 days SW Seed Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AquaBounty Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AquaBounty Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AquaBounty Technologies may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with SW Seed and AquaBounty Technologies

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

The idea behind SW Seed Company and AquaBounty Technologies 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.