Correlation Between Frost Low and SPACE
Can any of the company-specific risk be diversified away by investing in both Frost Low and SPACE 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 Frost Low and SPACE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frost Low Duration and SPACE, you can compare the effects of market volatilities on Frost Low and SPACE 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 Frost Low with a short position of SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frost Low and SPACE.
Diversification Opportunities for Frost Low and SPACE
Very good diversification
The 3 months correlation between Frost and SPACE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Frost Low Duration and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and Frost Low 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 Frost Low Duration are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Frost Low i.e., Frost Low and SPACE go up and down completely randomly.
Pair Corralation between Frost Low and SPACE
Assuming the 90 days horizon Frost Low is expected to generate 478.17 times less return on investment than SPACE. But when comparing it to its historical volatility, Frost Low Duration is 36.87 times less risky than SPACE. It trades about 0.04 of its potential returns per unit of risk. SPACE is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 36.00 in SPACE on September 3, 2024 and sell it today you would earn a total of 23.00 from holding SPACE or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Frost Low Duration vs. SPACE
Performance |
| Timeline |
| Frost Low Duration |
| SPACE |
Frost Low and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frost Low and SPACE
The main advantage of trading using opposite Frost Low and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frost Low position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| Frost Low vs. SPACE | Frost Low vs. Bayview Acquisition Corp | Frost Low vs. Ampleforth | Frost Low vs. ionet |
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 CEOs Directory module to screen CEOs from public companies around the world.
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