Correlation Between Golden Arrow and Nova Vision
Can any of the company-specific risk be diversified away by investing in both Golden Arrow and Nova Vision 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 Golden Arrow and Nova Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Arrow Merger and Nova Vision Acquisition, you can compare the effects of market volatilities on Golden Arrow and Nova Vision 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 Golden Arrow with a short position of Nova Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Arrow and Nova Vision.
Diversification Opportunities for Golden Arrow and Nova Vision
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and Nova is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Golden Arrow Merger and Nova Vision Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Vision Acquisition and Golden Arrow 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 Golden Arrow Merger are associated (or correlated) with Nova Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Vision Acquisition has no effect on the direction of Golden Arrow i.e., Golden Arrow and Nova Vision go up and down completely randomly.
Pair Corralation between Golden Arrow and Nova Vision
Given the investment horizon of 90 days Golden Arrow Merger is expected to under-perform the Nova Vision. But the stock apears to be less risky and, when comparing its historical volatility, Golden Arrow Merger is 1.77 times less risky than Nova Vision. The stock trades about -0.06 of its potential returns per unit of risk. The Nova Vision Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,031 in Nova Vision Acquisition on August 30, 2024 and sell it today you would earn a total of 2,669 from holding Nova Vision Acquisition or generate 258.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.26% |
| Values | Daily Returns |
Golden Arrow Merger vs. Nova Vision Acquisition
Performance |
| Timeline |
| Golden Arrow Merger |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nova Vision Acquisition |
Golden Arrow and Nova Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Arrow and Nova Vision
The main advantage of trading using opposite Golden Arrow and Nova Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Arrow position performs unexpectedly, Nova Vision 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 Nova Vision will offset losses from the drop in Nova Vision's long position.The idea behind Golden Arrow Merger and Nova Vision 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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