Correlation Between Inflection Point and New Horizon
Can any of the company-specific risk be diversified away by investing in both Inflection Point and New Horizon 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 Inflection Point and New Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and New Horizon Aircraft, you can compare the effects of market volatilities on Inflection Point and New Horizon 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 Inflection Point with a short position of New Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and New Horizon.
Diversification Opportunities for Inflection Point and New Horizon
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Inflection and New is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and New Horizon Aircraft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Horizon Aircraft and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with New Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Horizon Aircraft has no effect on the direction of Inflection Point i.e., Inflection Point and New Horizon go up and down completely randomly.
Pair Corralation between Inflection Point and New Horizon
Assuming the 90 days horizon Inflection Point is expected to generate 1.21 times less return on investment than New Horizon. But when comparing it to its historical volatility, Inflection Point Acquisition is 2.3 times less risky than New Horizon. It trades about 0.31 of its potential returns per unit of risk. New Horizon Aircraft is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 45.00 in New Horizon Aircraft on September 12, 2024 and sell it today you would earn a total of 15.20 from holding New Horizon Aircraft or generate 33.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Inflection Point Acquisition vs. New Horizon Aircraft
Performance |
| Timeline |
| Inflection Point Acq |
| New Horizon Aircraft |
Inflection Point and New Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and New Horizon
The main advantage of trading using opposite Inflection Point and New Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, New Horizon 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 New Horizon will offset losses from the drop in New Horizon's long position.| Inflection Point vs. 51Talk Online Education | Inflection Point vs. CarsalesCom Ltd ADR | Inflection Point vs. Osaka Steel Co, | Inflection Point vs. Marchex |
| New Horizon vs. Cracker Barrel Old | New Horizon vs. Dominos Pizza | New Horizon vs. SEI Investments | New Horizon vs. Rave Restaurant Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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