Correlation Between Embrace Change and Berenson Acquisition
Can any of the company-specific risk be diversified away by investing in both Embrace Change and Berenson 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 Embrace Change and Berenson Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embrace Change Acquisition and Berenson Acquisition Corp, you can compare the effects of market volatilities on Embrace Change and Berenson 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 Embrace Change with a short position of Berenson Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Berenson Acquisition.
Diversification Opportunities for Embrace Change and Berenson Acquisition
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embrace and Berenson is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Berenson Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berenson Acquisition Corp and Embrace Change 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 Embrace Change Acquisition are associated (or correlated) with Berenson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berenson Acquisition Corp has no effect on the direction of Embrace Change i.e., Embrace Change and Berenson Acquisition go up and down completely randomly.
Pair Corralation between Embrace Change and Berenson Acquisition
Given the investment horizon of 90 days Embrace Change Acquisition is expected to generate 0.6 times more return on investment than Berenson Acquisition. However, Embrace Change Acquisition is 1.66 times less risky than Berenson Acquisition. It trades about 0.14 of its potential returns per unit of risk. Berenson Acquisition Corp is currently generating about -0.03 per unit of risk. If you would invest 1,124 in Embrace Change Acquisition on September 1, 2024 and sell it today you would earn a total of 41.00 from holding Embrace Change Acquisition or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.67% |
| Values | Daily Returns |
Embrace Change Acquisition vs. Berenson Acquisition Corp
Performance |
| Timeline |
| Embrace Change Acqui |
| Berenson Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Embrace Change and Berenson Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embrace Change and Berenson Acquisition
The main advantage of trading using opposite Embrace Change and Berenson Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embrace Change position performs unexpectedly, Berenson 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 Berenson Acquisition will offset losses from the drop in Berenson Acquisition's long position.| Embrace Change vs. China Health Management | Embrace Change vs. Absolute Health and | Embrace Change vs. Supurva Healthcare Group | Embrace Change vs. TransAKT |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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