Correlation Between Global Lights and PowerUp Acquisition
Can any of the company-specific risk be diversified away by investing in both Global Lights 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 Global Lights and PowerUp Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Lights Acquisition and PowerUp Acquisition Corp, you can compare the effects of market volatilities on Global Lights 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 Global Lights with a short position of PowerUp Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Lights and PowerUp Acquisition.
Diversification Opportunities for Global Lights and PowerUp Acquisition
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and PowerUp is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Global Lights Acquisition 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 Global Lights 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 Global Lights Acquisition 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 Global Lights i.e., Global Lights and PowerUp Acquisition go up and down completely randomly.
Pair Corralation between Global Lights and PowerUp Acquisition
Assuming the 90 days horizon Global Lights Acquisition is expected to generate 0.16 times more return on investment than PowerUp Acquisition. However, Global Lights Acquisition is 6.21 times less risky than PowerUp Acquisition. It trades about 0.24 of its potential returns per unit of risk. PowerUp Acquisition Corp is currently generating about -0.17 per unit of risk. If you would invest 1,070 in Global Lights Acquisition on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Global Lights Acquisition or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Lights Acquisition vs. PowerUp Acquisition Corp
Performance |
| Timeline |
| Global Lights Acquisition |
| PowerUp Acquisition Corp |
Global Lights and PowerUp Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Lights and PowerUp Acquisition
The main advantage of trading using opposite Global Lights and PowerUp Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Lights 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.| Global Lights vs. Radcom | Global Lights vs. JD Sports Fashion | Global Lights vs. Sphere Entertainment Co | Global Lights vs. Iridium Communications |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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