Correlation Between Marblegate Acquisition and Phoenix Biotech
Can any of the company-specific risk be diversified away by investing in both Marblegate Acquisition and Phoenix Biotech 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 Marblegate Acquisition and Phoenix Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marblegate Acquisition Corp and Phoenix Biotech Acquisition, you can compare the effects of market volatilities on Marblegate Acquisition and Phoenix Biotech 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 Marblegate Acquisition with a short position of Phoenix Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marblegate Acquisition and Phoenix Biotech.
Diversification Opportunities for Marblegate Acquisition and Phoenix Biotech
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Marblegate and Phoenix is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Marblegate Acquisition Corp and Phoenix Biotech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Biotech Acqu and Marblegate 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 Marblegate Acquisition Corp are associated (or correlated) with Phoenix Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Biotech Acqu has no effect on the direction of Marblegate Acquisition i.e., Marblegate Acquisition and Phoenix Biotech go up and down completely randomly.
Pair Corralation between Marblegate Acquisition and Phoenix Biotech
Assuming the 90 days horizon Marblegate Acquisition is expected to generate 3.3 times less return on investment than Phoenix Biotech. But when comparing it to its historical volatility, Marblegate Acquisition Corp is 1.7 times less risky than Phoenix Biotech. It trades about 0.08 of its potential returns per unit of risk. Phoenix Biotech Acquisition is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4.50 in Phoenix Biotech Acquisition on August 26, 2024 and sell it today you would earn a total of 1.61 from holding Phoenix Biotech Acquisition or generate 35.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 13.08% |
| Values | Daily Returns |
Marblegate Acquisition Corp vs. Phoenix Biotech Acquisition
Performance |
| Timeline |
| Marblegate Acquisition |
| Phoenix Biotech Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Marblegate Acquisition and Phoenix Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marblegate Acquisition and Phoenix Biotech
The main advantage of trading using opposite Marblegate Acquisition and Phoenix Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marblegate Acquisition position performs unexpectedly, Phoenix Biotech 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 Phoenix Biotech will offset losses from the drop in Phoenix Biotech's long position.The idea behind Marblegate Acquisition Corp and Phoenix Biotech 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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