Correlation Between Associated Capital and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition Corp, you can compare the effects of market volatilities on Associated Capital and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Mars Acquisition.
Diversification Opportunities for Associated Capital and Mars Acquisition
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Associated and Mars is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Associated Capital i.e., Associated Capital and Mars Acquisition go up and down completely randomly.
Pair Corralation between Associated Capital and Mars Acquisition
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.8 times more return on investment than Mars Acquisition. However, Associated Capital is 1.8 times more volatile than Mars Acquisition Corp. It trades about 0.09 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about -0.05 per unit of risk. If you would invest 3,104 in Associated Capital Group on September 5, 2024 and sell it today you would earn a total of 408.00 from holding Associated Capital Group or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Mars Acquisition Corp
Performance |
| Timeline |
| Associated Capital |
| Mars Acquisition Corp |
Associated Capital and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Mars Acquisition
The main advantage of trading using opposite Associated Capital and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition's long position.| Associated Capital vs. Visa Class A | Associated Capital vs. Deutsche Bank AG | Associated Capital vs. Dynex Capital |
| Mars Acquisition vs. Visa Class A | Mars Acquisition vs. Deutsche Bank AG | Mars Acquisition vs. Dynex Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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