Correlation Between Fat Projects and Accretion Acquisition
Can any of the company-specific risk be diversified away by investing in both Fat Projects and Accretion 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 Fat Projects and Accretion Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fat Projects Acquisition and Accretion Acquisition Corp, you can compare the effects of market volatilities on Fat Projects and Accretion 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 Fat Projects with a short position of Accretion Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fat Projects and Accretion Acquisition.
Diversification Opportunities for Fat Projects and Accretion Acquisition
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fat and Accretion is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fat Projects Acquisition and Accretion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accretion Acquisition and Fat Projects 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 Fat Projects Acquisition are associated (or correlated) with Accretion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accretion Acquisition has no effect on the direction of Fat Projects i.e., Fat Projects and Accretion Acquisition go up and down completely randomly.
Pair Corralation between Fat Projects and Accretion Acquisition
Assuming the 90 days horizon Fat Projects is expected to generate 2.69 times less return on investment than Accretion Acquisition. But when comparing it to its historical volatility, Fat Projects Acquisition is 1.94 times less risky than Accretion Acquisition. It trades about 0.1 of its potential returns per unit of risk. Accretion Acquisition Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1.75 in Accretion Acquisition Corp on August 27, 2024 and sell it today you would earn a total of 0.74 from holding Accretion Acquisition Corp or generate 42.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.92% |
| Values | Daily Returns |
Fat Projects Acquisition vs. Accretion Acquisition Corp
Performance |
| Timeline |
| Fat Projects Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Accretion Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fat Projects and Accretion Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fat Projects and Accretion Acquisition
The main advantage of trading using opposite Fat Projects and Accretion Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fat Projects position performs unexpectedly, Accretion 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 Accretion Acquisition will offset losses from the drop in Accretion Acquisition's long position.The idea behind Fat Projects Acquisition and Accretion Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Accretion Acquisition vs. Sanyo Special Steel | Accretion Acquisition vs. Titan International | Accretion Acquisition vs. Molson Coors Brewing | Accretion Acquisition vs. Barrick Gold Corp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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