Correlation Between A SPAC and Juniper II
Can any of the company-specific risk be diversified away by investing in both A SPAC and Juniper II 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 A SPAC and Juniper II into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A SPAC II and Juniper II Corp, you can compare the effects of market volatilities on A SPAC and Juniper II 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 A SPAC with a short position of Juniper II. Check out your portfolio center. Please also check ongoing floating volatility patterns of A SPAC and Juniper II.
Diversification Opportunities for A SPAC and Juniper II
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASCB and Juniper is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding A SPAC II and Juniper II Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper II Corp and A SPAC 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 A SPAC II are associated (or correlated) with Juniper II. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper II Corp has no effect on the direction of A SPAC i.e., A SPAC and Juniper II go up and down completely randomly.
Pair Corralation between A SPAC and Juniper II
Given the investment horizon of 90 days A SPAC II is expected to generate 3.33 times more return on investment than Juniper II. However, A SPAC is 3.33 times more volatile than Juniper II Corp. It trades about 0.02 of its potential returns per unit of risk. Juniper II Corp is currently generating about 0.05 per unit of risk. If you would invest 1,014 in A SPAC II on August 30, 2024 and sell it today you would earn a total of 82.00 from holding A SPAC II or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
A SPAC II vs. Juniper II Corp
Performance |
| Timeline |
| A SPAC II |
| Juniper II Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
A SPAC and Juniper II Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A SPAC and Juniper II
The main advantage of trading using opposite A SPAC and Juniper II positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A SPAC position performs unexpectedly, Juniper II 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 Juniper II will offset losses from the drop in Juniper II's long position.The idea behind A SPAC II and Juniper II Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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