Correlation Between Embrace Change and Trans Global
Can any of the company-specific risk be diversified away by investing in both Embrace Change and Trans Global 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 Trans Global 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 Trans Global Grp, you can compare the effects of market volatilities on Embrace Change and Trans Global 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 Trans Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Trans Global.
Diversification Opportunities for Embrace Change and Trans Global
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Embrace and Trans is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Trans Global Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trans Global Grp 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 Trans Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trans Global Grp has no effect on the direction of Embrace Change i.e., Embrace Change and Trans Global go up and down completely randomly.
Pair Corralation between Embrace Change and Trans Global
Given the investment horizon of 90 days Embrace Change is expected to generate 82.1 times less return on investment than Trans Global. But when comparing it to its historical volatility, Embrace Change Acquisition is 106.28 times less risky than Trans Global. It trades about 0.12 of its potential returns per unit of risk. Trans Global Grp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Trans Global Grp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Trans Global Grp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embrace Change Acquisition vs. Trans Global Grp
Performance |
| Timeline |
| Embrace Change Acqui |
| Trans Global Grp |
Embrace Change and Trans Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embrace Change and Trans Global
The main advantage of trading using opposite Embrace Change and Trans Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embrace Change position performs unexpectedly, Trans Global 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 Trans Global will offset losses from the drop in Trans Global's long position.| Embrace Change vs. MFS High Income | Embrace Change vs. MFS Investment Grade | Embrace Change vs. Eaton Vance National | Embrace Change vs. Invesco High Income |
| Trans Global vs. Absolute Health and | Trans Global vs. China Health Management | Trans Global vs. Embrace Change Acquisition | Trans Global 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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