Correlation Between Finnovate Acquisition and Schultze Special
Can any of the company-specific risk be diversified away by investing in both Finnovate Acquisition and Schultze Special 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 Schultze Special 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 Schultze Special Purpose, you can compare the effects of market volatilities on Finnovate Acquisition and Schultze Special 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 Schultze Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnovate Acquisition and Schultze Special.
Diversification Opportunities for Finnovate Acquisition and Schultze Special
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finnovate and Schultze is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Finnovate Acquisition Corp and Schultze Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schultze Special Purpose 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 Schultze Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schultze Special Purpose has no effect on the direction of Finnovate Acquisition i.e., Finnovate Acquisition and Schultze Special go up and down completely randomly.
Pair Corralation between Finnovate Acquisition and Schultze Special
Given the investment horizon of 90 days Finnovate Acquisition is expected to generate 1.03 times less return on investment than Schultze Special. But when comparing it to its historical volatility, Finnovate Acquisition Corp is 1.27 times less risky than Schultze Special. It trades about 0.17 of its potential returns per unit of risk. Schultze Special Purpose is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,003 in Schultze Special Purpose on August 25, 2024 and sell it today you would earn a total of 44.00 from holding Schultze Special Purpose or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Finnovate Acquisition Corp vs. Schultze Special Purpose
Performance |
| Timeline |
| Finnovate Acquisition |
| Schultze Special Purpose |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Finnovate Acquisition and Schultze Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnovate Acquisition and Schultze Special
The main advantage of trading using opposite Finnovate Acquisition and Schultze Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnovate Acquisition position performs unexpectedly, Schultze Special 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 Schultze Special will offset losses from the drop in Schultze Special's long position.| Finnovate Acquisition vs. Broad Capital Acquisition | Finnovate Acquisition vs. Welsbach Technology Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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