Correlation Between Ares AcquisitionII and Afternext Healthtech
Can any of the company-specific risk be diversified away by investing in both Ares AcquisitionII and Afternext Healthtech 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 Ares AcquisitionII and Afternext Healthtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Acquisition and Afternext Healthtech Acquisition, you can compare the effects of market volatilities on Ares AcquisitionII and Afternext Healthtech 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 Ares AcquisitionII with a short position of Afternext Healthtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares AcquisitionII and Afternext Healthtech.
Diversification Opportunities for Ares AcquisitionII and Afternext Healthtech
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ares and Afternext is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ares Acquisition and Afternext Healthtech Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afternext Healthtech and Ares AcquisitionII 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 Ares Acquisition are associated (or correlated) with Afternext Healthtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afternext Healthtech has no effect on the direction of Ares AcquisitionII i.e., Ares AcquisitionII and Afternext Healthtech go up and down completely randomly.
Pair Corralation between Ares AcquisitionII and Afternext Healthtech
If you would invest 1,124 in Ares Acquisition on October 24, 2024 and sell it today you would earn a total of 16.00 from holding Ares Acquisition or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Ares Acquisition vs. Afternext Healthtech Acquisiti
Performance |
| Timeline |
| Ares AcquisitionII |
| Afternext Healthtech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ares AcquisitionII and Afternext Healthtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares AcquisitionII and Afternext Healthtech
The main advantage of trading using opposite Ares AcquisitionII and Afternext Healthtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares AcquisitionII position performs unexpectedly, Afternext Healthtech 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 Afternext Healthtech will offset losses from the drop in Afternext Healthtech's long position.| Ares AcquisitionII vs. Canada Goose Holdings | Ares AcquisitionII vs. Mangazeya Mining | Ares AcquisitionII vs. Cresud SACIF y | Ares AcquisitionII vs. VF Corporation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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