Correlation Between Associated Capital and Embrace Change
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Embrace Change 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 Associated Capital and Embrace Change into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Embrace Change Acquisition, you can compare the effects of market volatilities on Associated Capital and Embrace Change 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 Associated Capital with a short position of Embrace Change. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Embrace Change.
Diversification Opportunities for Associated Capital and Embrace Change
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Embrace is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Embrace Change Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embrace Change Acqui and Associated Capital 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 Associated Capital Group are associated (or correlated) with Embrace Change. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embrace Change Acqui has no effect on the direction of Associated Capital i.e., Associated Capital and Embrace Change go up and down completely randomly.
Pair Corralation between Associated Capital and Embrace Change
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.88 times more return on investment than Embrace Change. However, Associated Capital is 1.88 times more volatile than Embrace Change Acquisition. It trades about 0.03 of its potential returns per unit of risk. Embrace Change Acquisition is currently generating about 0.02 per unit of risk. If you would invest 3,261 in Associated Capital Group on September 4, 2024 and sell it today you would earn a total of 251.00 from holding Associated Capital Group or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Embrace Change Acquisition
Performance |
| Timeline |
| Associated Capital |
| Embrace Change Acqui |
Associated Capital and Embrace Change Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Embrace Change
The main advantage of trading using opposite Associated Capital and Embrace Change positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Embrace Change 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 Embrace Change will offset losses from the drop in Embrace Change's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Embrace Change vs. Visa Class A | Embrace Change vs. Diamond Hill Investment | Embrace Change vs. Associated Capital Group | Embrace Change vs. Brookfield Corp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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