Correlation Between LMF Acquisition and Chardan NexTech
Can any of the company-specific risk be diversified away by investing in both LMF Acquisition and Chardan NexTech 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 LMF Acquisition and Chardan NexTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LMF Acquisition Opportunities and Chardan NexTech Acquisition, you can compare the effects of market volatilities on LMF Acquisition and Chardan NexTech 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 LMF Acquisition with a short position of Chardan NexTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of LMF Acquisition and Chardan NexTech.
Diversification Opportunities for LMF Acquisition and Chardan NexTech
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between LMF and Chardan is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding LMF Acquisition Opportunities and Chardan NexTech Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chardan NexTech Acqu and LMF 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 LMF Acquisition Opportunities are associated (or correlated) with Chardan NexTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chardan NexTech Acqu has no effect on the direction of LMF Acquisition i.e., LMF Acquisition and Chardan NexTech go up and down completely randomly.
Pair Corralation between LMF Acquisition and Chardan NexTech
Assuming the 90 days horizon LMF Acquisition is expected to generate 4.58 times less return on investment than Chardan NexTech. But when comparing it to its historical volatility, LMF Acquisition Opportunities is 1.08 times less risky than Chardan NexTech. It trades about 0.01 of its potential returns per unit of risk. Chardan NexTech Acquisition is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.80 in Chardan NexTech Acquisition on August 24, 2024 and sell it today you would lose (0.02) from holding Chardan NexTech Acquisition or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
LMF Acquisition Opportunities vs. Chardan NexTech Acquisition
Performance |
| Timeline |
| LMF Acquisition Oppo |
| Chardan NexTech Acqu |
LMF Acquisition and Chardan NexTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LMF Acquisition and Chardan NexTech
The main advantage of trading using opposite LMF Acquisition and Chardan NexTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LMF Acquisition position performs unexpectedly, Chardan NexTech 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 Chardan NexTech will offset losses from the drop in Chardan NexTech's long position.| LMF Acquisition vs. LMF Acquisition Opportunities | LMF Acquisition vs. Cardio Diagnostics Holdings | LMF Acquisition vs. Revelation Biosciences | LMF Acquisition vs. OmniAb Inc |
| Chardan NexTech vs. Chardan NexTech Acquisition | Chardan NexTech vs. EVgo Equity Warrants | Chardan NexTech vs. Nauticus Robotics | Chardan NexTech vs. LMF Acquisition Opportunities |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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