Correlation Between DMY Squared and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both DMY Squared and IB 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 DMY Squared and IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between dMY Squared Technology and IB Acquisition Corp, you can compare the effects of market volatilities on DMY Squared and IB 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 DMY Squared with a short position of IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMY Squared and IB Acquisition.
Diversification Opportunities for DMY Squared and IB Acquisition
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DMY and IBACR is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding dMY Squared Technology and IB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IB Acquisition Corp and DMY Squared 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 dMY Squared Technology are associated (or correlated) with IB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IB Acquisition Corp has no effect on the direction of DMY Squared i.e., DMY Squared and IB Acquisition go up and down completely randomly.
Pair Corralation between DMY Squared and IB Acquisition
Given the investment horizon of 90 days dMY Squared Technology is expected to generate 0.02 times more return on investment than IB Acquisition. However, dMY Squared Technology is 46.39 times less risky than IB Acquisition. It trades about 0.12 of its potential returns per unit of risk. IB Acquisition Corp is currently generating about -0.06 per unit of risk. If you would invest 1,060 in dMY Squared Technology on September 13, 2024 and sell it today you would earn a total of 10.00 from holding dMY Squared Technology or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
dMY Squared Technology vs. IB Acquisition Corp
Performance |
| Timeline |
| dMY Squared Technology |
| IB Acquisition Corp |
DMY Squared and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMY Squared and IB Acquisition
The main advantage of trading using opposite DMY Squared and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMY Squared position performs unexpectedly, IB 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 IB Acquisition will offset losses from the drop in IB Acquisition's long position.| DMY Squared vs. Visa Class A | DMY Squared vs. Diamond Hill Investment | DMY Squared vs. Distoken Acquisition | DMY Squared vs. AllianceBernstein Holding LP |
| IB Acquisition vs. JD Sports Fashion | IB Acquisition vs. Saia Inc | IB Acquisition vs. Mesa Air Group | IB Acquisition vs. Lindblad Expeditions Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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