Correlation Between Finnovate Acquisition and LatAmGrowth SPAC
Can any of the company-specific risk be diversified away by investing in both Finnovate Acquisition and LatAmGrowth SPAC 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 Finnovate Acquisition and LatAmGrowth SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnovate Acquisition Corp and LatAmGrowth SPAC, you can compare the effects of market volatilities on Finnovate Acquisition and LatAmGrowth SPAC 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 Finnovate Acquisition with a short position of LatAmGrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnovate Acquisition and LatAmGrowth SPAC.
Diversification Opportunities for Finnovate Acquisition and LatAmGrowth SPAC
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Finnovate and LatAmGrowth is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Finnovate Acquisition Corp and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC and Finnovate 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 Finnovate Acquisition Corp are associated (or correlated) with LatAmGrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LatAmGrowth SPAC has no effect on the direction of Finnovate Acquisition i.e., Finnovate Acquisition and LatAmGrowth SPAC go up and down completely randomly.
Pair Corralation between Finnovate Acquisition and LatAmGrowth SPAC
Given the investment horizon of 90 days Finnovate Acquisition is expected to generate 2.96 times less return on investment than LatAmGrowth SPAC. In addition to that, Finnovate Acquisition is 2.38 times more volatile than LatAmGrowth SPAC. It trades about 0.05 of its total potential returns per unit of risk. LatAmGrowth SPAC is currently generating about 0.38 per unit of volatility. If you would invest 1,150 in LatAmGrowth SPAC on August 25, 2024 and sell it today you would earn a total of 18.00 from holding LatAmGrowth SPAC or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finnovate Acquisition Corp vs. LatAmGrowth SPAC
Performance |
| Timeline |
| Finnovate Acquisition |
| LatAmGrowth SPAC |
Finnovate Acquisition and LatAmGrowth SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnovate Acquisition and LatAmGrowth SPAC
The main advantage of trading using opposite Finnovate Acquisition and LatAmGrowth SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnovate Acquisition position performs unexpectedly, LatAmGrowth SPAC 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 LatAmGrowth SPAC will offset losses from the drop in LatAmGrowth SPAC's long position.| Finnovate Acquisition vs. Broad Capital Acquisition | Finnovate Acquisition vs. Welsbach Technology Metals |
| LatAmGrowth SPAC vs. PowerUp Acquisition Corp | LatAmGrowth SPAC vs. Aurora Innovation | LatAmGrowth SPAC vs. HUMANA INC | LatAmGrowth SPAC vs. Aquagold International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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