Correlation Between Acme United and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Acme United and Inflection Point 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 Acme United and Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and Inflection Point Acquisition, you can compare the effects of market volatilities on Acme United and Inflection Point 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 Acme United with a short position of Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and Inflection Point.
Diversification Opportunities for Acme United and Inflection Point
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acme and Inflection is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and Acme United 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 Acme United are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Acme United i.e., Acme United and Inflection Point go up and down completely randomly.
Pair Corralation between Acme United and Inflection Point
Considering the 90-day investment horizon Acme United is expected to under-perform the Inflection Point. But the stock apears to be less risky and, when comparing its historical volatility, Acme United is 2.62 times less risky than Inflection Point. The stock trades about -0.56 of its potential returns per unit of risk. The Inflection Point Acquisition is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Inflection Point Acquisition on October 13, 2024 and sell it today you would lose (10.00) from holding Inflection Point Acquisition or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Acme United vs. Inflection Point Acquisition
Performance |
| Timeline |
| Acme United |
| Inflection Point Acq |
Acme United and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and Inflection Point
The main advantage of trading using opposite Acme United and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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