Correlation Between Fusion Acquisition and Financial Strategies
Can any of the company-specific risk be diversified away by investing in both Fusion Acquisition and Financial Strategies 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 Fusion Acquisition and Financial Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fusion Acquisition Corp and Financial Strategies Acquisition, you can compare the effects of market volatilities on Fusion Acquisition and Financial Strategies 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 Fusion Acquisition with a short position of Financial Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Acquisition and Financial Strategies.
Diversification Opportunities for Fusion Acquisition and Financial Strategies
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fusion and Financial is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Acquisition Corp and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies and Fusion 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 Fusion Acquisition Corp are associated (or correlated) with Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of Fusion Acquisition i.e., Fusion Acquisition and Financial Strategies go up and down completely randomly.
Pair Corralation between Fusion Acquisition and Financial Strategies
If you would invest 1,090 in Financial Strategies Acquisition on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Financial Strategies Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fusion Acquisition Corp vs. Financial Strategies Acquisiti
Performance |
| Timeline |
| Fusion Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Financial Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fusion Acquisition and Financial Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fusion Acquisition and Financial Strategies
The main advantage of trading using opposite Fusion Acquisition and Financial Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fusion Acquisition position performs unexpectedly, Financial Strategies 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 Financial Strategies will offset losses from the drop in Financial Strategies' long position.The idea behind Fusion Acquisition Corp and Financial Strategies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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