Correlation Between Vita Coco and RMG Acquisition
Can any of the company-specific risk be diversified away by investing in both Vita Coco and RMG 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 Vita Coco and RMG Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vita Coco and RMG Acquisition Corp, you can compare the effects of market volatilities on Vita Coco and RMG 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 Vita Coco with a short position of RMG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Coco and RMG Acquisition.
Diversification Opportunities for Vita Coco and RMG Acquisition
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vita and RMG is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Vita Coco and RMG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RMG Acquisition Corp and Vita Coco 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 Vita Coco are associated (or correlated) with RMG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RMG Acquisition Corp has no effect on the direction of Vita Coco i.e., Vita Coco and RMG Acquisition go up and down completely randomly.
Pair Corralation between Vita Coco and RMG Acquisition
If you would invest 2,685 in Vita Coco on September 12, 2024 and sell it today you would earn a total of 1,035 from holding Vita Coco or generate 38.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Vita Coco vs. RMG Acquisition Corp
Performance |
| Timeline |
| Vita Coco |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vita Coco and RMG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vita Coco and RMG Acquisition
The main advantage of trading using opposite Vita Coco and RMG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Coco position performs unexpectedly, RMG 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 RMG Acquisition will offset losses from the drop in RMG Acquisition's long position.| Vita Coco vs. Celsius Holdings | Vita Coco vs. Monster Beverage Corp | Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Keurig Dr Pepper |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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