Correlation Between Eureka Acquisition and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both Eureka Acquisition 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 Eureka Acquisition and IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eureka Acquisition Corp and IB Acquisition Corp, you can compare the effects of market volatilities on Eureka Acquisition 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 Eureka Acquisition with a short position of IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Acquisition and IB Acquisition.
Diversification Opportunities for Eureka Acquisition and IB Acquisition
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eureka and IBACR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Acquisition Corp 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 Eureka 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 Eureka Acquisition Corp 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 Eureka Acquisition i.e., Eureka Acquisition and IB Acquisition go up and down completely randomly.
Pair Corralation between Eureka Acquisition and IB Acquisition
Given the investment horizon of 90 days Eureka Acquisition is expected to generate 7.26 times less return on investment than IB Acquisition. But when comparing it to its historical volatility, Eureka Acquisition Corp is 201.18 times less risky than IB Acquisition. It trades about 0.19 of its potential returns per unit of risk. IB Acquisition Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6.50 in IB Acquisition Corp on October 9, 2024 and sell it today you would lose (0.49) from holding IB Acquisition Corp or give up 7.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Eureka Acquisition Corp vs. IB Acquisition Corp
Performance |
| Timeline |
| Eureka Acquisition Corp |
| IB Acquisition Corp |
Eureka Acquisition and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eureka Acquisition and IB Acquisition
The main advantage of trading using opposite Eureka Acquisition and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eureka Acquisition 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.| Eureka Acquisition vs. Cedar Realty Trust | Eureka Acquisition vs. Summit Therapeutics PLC | Eureka Acquisition vs. Viemed Healthcare | Eureka Acquisition vs. MOGU Inc |
| IB Acquisition vs. MACOM Technology Solutions | IB Acquisition vs. American Environmental | IB Acquisition vs. Kaiser Aluminum | IB Acquisition vs. Worthington Steel |
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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