Correlation Between Accretion Acquisition and Direct Line
Can any of the company-specific risk be diversified away by investing in both Accretion Acquisition and Direct Line 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 Accretion Acquisition and Direct Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accretion Acquisition Corp and Direct Line Insurance, you can compare the effects of market volatilities on Accretion Acquisition and Direct Line 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 Accretion Acquisition with a short position of Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accretion Acquisition and Direct Line.
Diversification Opportunities for Accretion Acquisition and Direct Line
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Accretion and Direct is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Accretion Acquisition Corp and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance and Accretion Acquisition 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 Accretion Acquisition Corp are associated (or correlated) with Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of Accretion Acquisition i.e., Accretion Acquisition and Direct Line go up and down completely randomly.
Pair Corralation between Accretion Acquisition and Direct Line
If you would invest 763.00 in Direct Line Insurance on September 14, 2024 and sell it today you would earn a total of 490.00 from holding Direct Line Insurance or generate 64.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Accretion Acquisition Corp vs. Direct Line Insurance
Performance |
| Timeline |
| Accretion Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Direct Line Insurance |
Accretion Acquisition and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accretion Acquisition and Direct Line
The main advantage of trading using opposite Accretion Acquisition and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accretion Acquisition position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| Accretion Acquisition vs. Direct Line Insurance | Accretion Acquisition vs. Sapiens International | Accretion Acquisition vs. MGIC Investment Corp | Accretion Acquisition vs. Definitive Healthcare Corp |
| Direct Line vs. Cardinal Health | Direct Line vs. Arm Holdings plc | Direct Line vs. Black Hills | Direct Line vs. Amkor Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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