Correlation Between Sprott Focus and PowerUp Acquisition
Can any of the company-specific risk be diversified away by investing in both Sprott Focus and PowerUp 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 Sprott Focus and PowerUp Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Focus Trust and PowerUp Acquisition Corp, you can compare the effects of market volatilities on Sprott Focus and PowerUp 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 Sprott Focus with a short position of PowerUp Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Focus and PowerUp Acquisition.
Diversification Opportunities for Sprott Focus and PowerUp Acquisition
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sprott and PowerUp is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and PowerUp Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerUp Acquisition Corp and Sprott Focus 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 Sprott Focus Trust are associated (or correlated) with PowerUp Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerUp Acquisition Corp has no effect on the direction of Sprott Focus i.e., Sprott Focus and PowerUp Acquisition go up and down completely randomly.
Pair Corralation between Sprott Focus and PowerUp Acquisition
Given the investment horizon of 90 days Sprott Focus is expected to generate 1.08 times less return on investment than PowerUp Acquisition. But when comparing it to its historical volatility, Sprott Focus Trust is 3.27 times less risky than PowerUp Acquisition. It trades about 0.08 of its potential returns per unit of risk. PowerUp Acquisition Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,123 in PowerUp Acquisition Corp on August 29, 2024 and sell it today you would earn a total of 27.00 from holding PowerUp Acquisition Corp or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sprott Focus Trust vs. PowerUp Acquisition Corp
Performance |
| Timeline |
| Sprott Focus Trust |
| PowerUp Acquisition Corp |
Sprott Focus and PowerUp Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Focus and PowerUp Acquisition
The main advantage of trading using opposite Sprott Focus and PowerUp Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Focus position performs unexpectedly, PowerUp 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 PowerUp Acquisition will offset losses from the drop in PowerUp Acquisition's long position.| Sprott Focus vs. MFS Investment Grade | Sprott Focus vs. Invesco High Income | Sprott Focus vs. Eaton Vance National | Sprott Focus vs. Nuveen California Select |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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