Correlation Between Armada Acquisition and Ace Global
Can any of the company-specific risk be diversified away by investing in both Armada Acquisition and Ace Global 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 Armada Acquisition and Ace Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Acquisition Corp and Ace Global Business, you can compare the effects of market volatilities on Armada Acquisition and Ace Global 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 Armada Acquisition with a short position of Ace Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Acquisition and Ace Global.
Diversification Opportunities for Armada Acquisition and Ace Global
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Armada and Ace is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Armada Acquisition Corp and Ace Global Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Global Business and Armada Acquisition 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 Armada Acquisition Corp are associated (or correlated) with Ace Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Global Business has no effect on the direction of Armada Acquisition i.e., Armada Acquisition and Ace Global go up and down completely randomly.
Pair Corralation between Armada Acquisition and Ace Global
Given the investment horizon of 90 days Armada Acquisition Corp is expected to under-perform the Ace Global. But the stock apears to be less risky and, when comparing its historical volatility, Armada Acquisition Corp is 3.7 times less risky than Ace Global. The stock trades about -0.04 of its potential returns per unit of risk. The Ace Global Business is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.87 in Ace Global Business on September 3, 2024 and sell it today you would earn a total of 1.85 from holding Ace Global Business or generate 98.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 19.03% |
| Values | Daily Returns |
Armada Acquisition Corp vs. Ace Global Business
Performance |
| Timeline |
| Armada Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ace Global Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Armada Acquisition and Ace Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Armada Acquisition and Ace Global
The main advantage of trading using opposite Armada Acquisition and Ace Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Acquisition position performs unexpectedly, Ace Global 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 Ace Global will offset losses from the drop in Ace Global's long position.| Armada Acquisition vs. Green Planet Bio | Armada Acquisition vs. Opus Magnum Ameris | Armada Acquisition vs. Azure Holding Group | Armada Acquisition vs. Four Leaf Acquisition |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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