Correlation Between Evergreen Corp and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both Evergreen Corp 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 Evergreen Corp and IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen Corp and IB Acquisition Corp, you can compare the effects of market volatilities on Evergreen Corp 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 Evergreen Corp with a short position of IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen Corp and IB Acquisition.
Diversification Opportunities for Evergreen Corp and IB Acquisition
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Evergreen and IBACR is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen 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 Evergreen Corp 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 Evergreen 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 Evergreen Corp i.e., Evergreen Corp and IB Acquisition go up and down completely randomly.
Pair Corralation between Evergreen Corp and IB Acquisition
Given the investment horizon of 90 days Evergreen Corp is expected to generate 1.89 times less return on investment than IB Acquisition. But when comparing it to its historical volatility, Evergreen Corp is 124.27 times less risky than IB Acquisition. It trades about 0.44 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 |
Evergreen Corp vs. IB Acquisition Corp
Performance |
| Timeline |
| Evergreen Corp |
| IB Acquisition Corp |
Evergreen Corp and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen Corp and IB Acquisition
The main advantage of trading using opposite Evergreen Corp and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen Corp 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.| Evergreen Corp vs. Finnovate Acquisition Corp | Evergreen Corp vs. IX Acquisition Corp | Evergreen Corp vs. LatAmGrowth SPAC | Evergreen Corp vs. Denali Capital Acquisition |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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