Correlation Between Dragonfly and NH SPAC
Can any of the company-specific risk be diversified away by investing in both Dragonfly and NH SPAC 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 Dragonfly and NH SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dragonfly GF Co and NH SPAC 2, you can compare the effects of market volatilities on Dragonfly and NH SPAC 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 Dragonfly with a short position of NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dragonfly and NH SPAC.
Diversification Opportunities for Dragonfly and NH SPAC
Very weak diversification
The 3 months correlation between Dragonfly and 206640 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dragonfly GF Co and NH SPAC 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 2 and Dragonfly 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 Dragonfly GF Co are associated (or correlated) with NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 2 has no effect on the direction of Dragonfly i.e., Dragonfly and NH SPAC go up and down completely randomly.
Pair Corralation between Dragonfly and NH SPAC
Assuming the 90 days trading horizon Dragonfly GF Co is expected to under-perform the NH SPAC. In addition to that, Dragonfly is 1.41 times more volatile than NH SPAC 2. It trades about -0.04 of its total potential returns per unit of risk. NH SPAC 2 is currently generating about 0.05 per unit of volatility. If you would invest 1,000,623 in NH SPAC 2 on September 12, 2024 and sell it today you would earn a total of 604,377 from holding NH SPAC 2 or generate 60.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Dragonfly GF Co vs. NH SPAC 2
Performance |
| Timeline |
| Dragonfly GF |
| NH SPAC 2 |
Dragonfly and NH SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dragonfly and NH SPAC
The main advantage of trading using opposite Dragonfly and NH SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dragonfly position performs unexpectedly, NH SPAC 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 NH SPAC will offset losses from the drop in NH SPAC's long position.| Dragonfly vs. Samsung Electronics Co | Dragonfly vs. Samsung Electronics Co | Dragonfly vs. LG Energy Solution | Dragonfly vs. SK Hynix |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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