Correlation Between Broad Capital and APx Acquisition
Can any of the company-specific risk be diversified away by investing in both Broad Capital and APx 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 Broad Capital and APx Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broad Capital Acquisition and APx Acquisition Corp, you can compare the effects of market volatilities on Broad Capital and APx 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 Broad Capital with a short position of APx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and APx Acquisition.
Diversification Opportunities for Broad Capital and APx Acquisition
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broad and APx is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and APx Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APx Acquisition Corp and Broad 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 Broad Capital Acquisition are associated (or correlated) with APx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APx Acquisition Corp has no effect on the direction of Broad Capital i.e., Broad Capital and APx Acquisition go up and down completely randomly.
Pair Corralation between Broad Capital and APx Acquisition
Assuming the 90 days horizon Broad Capital is expected to generate 2.69 times less return on investment than APx Acquisition. In addition to that, Broad Capital is 1.15 times more volatile than APx Acquisition Corp. It trades about 0.01 of its total potential returns per unit of risk. APx Acquisition Corp is currently generating about 0.03 per unit of volatility. If you would invest 1,119 in APx Acquisition Corp on September 1, 2024 and sell it today you would earn a total of 36.00 from holding APx Acquisition Corp or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.62% |
| Values | Daily Returns |
Broad Capital Acquisition vs. APx Acquisition Corp
Performance |
| Timeline |
| Broad Capital Acquisition |
| APx Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Broad Capital and APx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broad Capital and APx Acquisition
The main advantage of trading using opposite Broad Capital and APx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital position performs unexpectedly, APx 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 APx Acquisition will offset losses from the drop in APx Acquisition's long position.| Broad Capital vs. Finnovate Acquisition Corp | Broad Capital vs. Welsbach Technology Metals | Broad Capital vs. Healthcare AI Acquisition | Broad Capital vs. Metal Sky Star |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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