Correlation Between Broad Capital and SK Growth
Can any of the company-specific risk be diversified away by investing in both Broad Capital and SK Growth 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 SK Growth 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 SK Growth Opportunities, you can compare the effects of market volatilities on Broad Capital and SK Growth 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 SK Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and SK Growth.
Diversification Opportunities for Broad Capital and SK Growth
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Broad and SKGR is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and SK Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Growth Opportunities 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 SK Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Growth Opportunities has no effect on the direction of Broad Capital i.e., Broad Capital and SK Growth go up and down completely randomly.
Pair Corralation between Broad Capital and SK Growth
Assuming the 90 days horizon Broad Capital is expected to generate 1.11 times less return on investment than SK Growth. In addition to that, Broad Capital is 1.49 times more volatile than SK Growth Opportunities. It trades about 0.04 of its total potential returns per unit of risk. SK Growth Opportunities is currently generating about 0.06 per unit of volatility. If you would invest 1,013 in SK Growth Opportunities on September 3, 2024 and sell it today you would earn a total of 141.00 from holding SK Growth Opportunities or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broad Capital Acquisition vs. SK Growth Opportunities
Performance |
| Timeline |
| Broad Capital Acquisition |
| SK Growth Opportunities |
Broad Capital and SK Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broad Capital and SK Growth
The main advantage of trading using opposite Broad Capital and SK Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital position performs unexpectedly, SK Growth 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 SK Growth will offset losses from the drop in SK Growth's long position.| Broad Capital vs. Alpha One | Broad Capital vs. Manaris Corp | Broad Capital vs. SCOR PK | Broad Capital vs. Aquagold International |
| SK Growth vs. Four Leaf Acquisition | SK Growth vs. WinVest Acquisition Corp | SK Growth vs. Thunder Bridge Capital | SK Growth vs. Pearl Holdings Acquisition |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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