Correlation Between Finnovate Acquisition and Crescera Capital
Can any of the company-specific risk be diversified away by investing in both Finnovate Acquisition and Crescera Capital 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 Crescera Capital 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 Crescera Capital Acquisition, you can compare the effects of market volatilities on Finnovate Acquisition and Crescera Capital 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 Crescera Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnovate Acquisition and Crescera Capital.
Diversification Opportunities for Finnovate Acquisition and Crescera Capital
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Finnovate and Crescera is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Finnovate Acquisition Corp and Crescera Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescera Capital Acq 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 Crescera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescera Capital Acq has no effect on the direction of Finnovate Acquisition i.e., Finnovate Acquisition and Crescera Capital go up and down completely randomly.
Pair Corralation between Finnovate Acquisition and Crescera Capital
If you would invest 1.91 in Finnovate Acquisition Corp on September 3, 2024 and sell it today you would lose (0.01) from holding Finnovate Acquisition Corp or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 14.29% |
| Values | Daily Returns |
Finnovate Acquisition Corp vs. Crescera Capital Acquisition
Performance |
| Timeline |
| Finnovate Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Crescera Capital Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Finnovate Acquisition and Crescera Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnovate Acquisition and Crescera Capital
The main advantage of trading using opposite Finnovate Acquisition and Crescera Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnovate Acquisition position performs unexpectedly, Crescera Capital 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 Crescera Capital will offset losses from the drop in Crescera Capital's long position.The idea behind Finnovate Acquisition Corp and Crescera Capital Acquisition 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.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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