Correlation Between Corner Growth and MedTech Acquisition
Can any of the company-specific risk be diversified away by investing in both Corner Growth and MedTech 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 Corner Growth and MedTech Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corner Growth Acquisition and MedTech Acquisition, you can compare the effects of market volatilities on Corner Growth and MedTech 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 Corner Growth with a short position of MedTech Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corner Growth and MedTech Acquisition.
Diversification Opportunities for Corner Growth and MedTech Acquisition
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Corner and MedTech is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Corner Growth Acquisition and MedTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedTech Acquisition and Corner Growth 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 Corner Growth Acquisition are associated (or correlated) with MedTech Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedTech Acquisition has no effect on the direction of Corner Growth i.e., Corner Growth and MedTech Acquisition go up and down completely randomly.
Pair Corralation between Corner Growth and MedTech Acquisition
Assuming the 90 days horizon Corner Growth is expected to generate 2.52 times less return on investment than MedTech Acquisition. But when comparing it to its historical volatility, Corner Growth Acquisition is 1.81 times less risky than MedTech Acquisition. It trades about 0.08 of its potential returns per unit of risk. MedTech Acquisition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12.00 in MedTech Acquisition on November 4, 2024 and sell it today you would lose (2.00) from holding MedTech Acquisition or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 32.27% |
| Values | Daily Returns |
Corner Growth Acquisition vs. MedTech Acquisition
Performance |
| Timeline |
| Corner Growth Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MedTech Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Corner Growth and MedTech Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corner Growth and MedTech Acquisition
The main advantage of trading using opposite Corner Growth and MedTech Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corner Growth position performs unexpectedly, MedTech 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 MedTech Acquisition will offset losses from the drop in MedTech Acquisition's long position.The idea behind Corner Growth Acquisition and MedTech Acquisition 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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