Correlation Between PH Tech and LIG-ES SPAC
Can any of the company-specific risk be diversified away by investing in both PH Tech and LIG-ES 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 PH Tech and LIG-ES SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and LIG ES SPAC, you can compare the effects of market volatilities on PH Tech and LIG-ES 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 PH Tech with a short position of LIG-ES SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and LIG-ES SPAC.
Diversification Opportunities for PH Tech and LIG-ES SPAC
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 239890 and LIG-ES is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and LIG ES SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIG ES SPAC and PH Tech 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 PH Tech Co are associated (or correlated) with LIG-ES SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIG ES SPAC has no effect on the direction of PH Tech i.e., PH Tech and LIG-ES SPAC go up and down completely randomly.
Pair Corralation between PH Tech and LIG-ES SPAC
Assuming the 90 days trading horizon PH Tech Co is expected to generate 1.63 times more return on investment than LIG-ES SPAC. However, PH Tech is 1.63 times more volatile than LIG ES SPAC. It trades about 0.06 of its potential returns per unit of risk. LIG ES SPAC is currently generating about -0.22 per unit of risk. If you would invest 670,000 in PH Tech Co on September 13, 2024 and sell it today you would earn a total of 31,000 from holding PH Tech Co or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PH Tech Co vs. LIG ES SPAC
Performance |
| Timeline |
| PH Tech |
| LIG ES SPAC |
PH Tech and LIG-ES SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and LIG-ES SPAC
The main advantage of trading using opposite PH Tech and LIG-ES SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, LIG-ES 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 LIG-ES SPAC will offset losses from the drop in LIG-ES SPAC's long position.The idea behind PH Tech Co and LIG ES SPAC 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.| LIG-ES SPAC vs. Hyundai Green Food | LIG-ES SPAC vs. Samlip General Foods | LIG-ES SPAC vs. Stic Investments | LIG-ES SPAC vs. Samyang Foods Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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