Correlation Between Israel Acquisitions and Aquagold International

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

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

Diversification Opportunities for Israel Acquisitions and Aquagold International

0.45

Correlation Coefficient

Israel Acquisitions  Aquagold International

Very weak diversification

The 3 months correlation between Israel and Aquagold is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Israel Acquisitions Corp and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Israel Acquisitions 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 Israel Acquisitions Corp 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 Israel Acquisitions i.e., Israel Acquisitions and Aquagold International go up and down completely randomly.

Pair Corralation between Israel Acquisitions and Aquagold International

Given the investment horizon of 90 days Israel Acquisitions Corp is expected to generate 0.03 times more return on investment than Aquagold International. However, Israel Acquisitions Corp is 36.29 times less risky than Aquagold International. It trades about 0.14 of its potential returns per unit of risk. Aquagold International is currently generating about -0.03 per unit of risk. If you would invest  1,042  in Israel Acquisitions Corp on February 2, 2024 and sell it today you would earn a total of  51.00  from holding Israel Acquisitions Corp or generate 4.89% return on investment over 90 days.

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

Israel Acquisitions Corp  vs.  Aquagold International

Israel Acquisitions Corp

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Acquisitions Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Israel Acquisitions is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 Israel Acquisitions and Aquagold International

The main advantage of trading using opposite Israel Acquisitions and Aquagold International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Acquisitions 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 Israel Acquisitions Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.