Correlation Between Kingswood Acquisition and Digital Health
Can any of the company-specific risk be diversified away by investing in both Kingswood Acquisition and Digital Health 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 Kingswood Acquisition and Digital Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingswood Acquisition Corp and Digital Health Acquisition, you can compare the effects of market volatilities on Kingswood Acquisition and Digital Health 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 Kingswood Acquisition with a short position of Digital Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingswood Acquisition and Digital Health.
Diversification Opportunities for Kingswood Acquisition and Digital Health
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingswood and Digital is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kingswood Acquisition Corp and Digital Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Health Acqui and Kingswood 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 Kingswood Acquisition Corp are associated (or correlated) with Digital Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Health Acqui has no effect on the direction of Kingswood Acquisition i.e., Kingswood Acquisition and Digital Health go up and down completely randomly.
Pair Corralation between Kingswood Acquisition and Digital Health
Given the investment horizon of 90 days Kingswood Acquisition is expected to generate 5.65 times less return on investment than Digital Health. But when comparing it to its historical volatility, Kingswood Acquisition Corp is 1.69 times less risky than Digital Health. It trades about 0.01 of its potential returns per unit of risk. Digital Health Acquisition is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,060 in Digital Health Acquisition on August 30, 2024 and sell it today you would earn a total of 151.00 from holding Digital Health Acquisition or generate 14.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 10.1% |
| Values | Daily Returns |
Kingswood Acquisition Corp vs. Digital Health Acquisition
Performance |
| Timeline |
| Kingswood Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Digital Health Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kingswood Acquisition and Digital Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingswood Acquisition and Digital Health
The main advantage of trading using opposite Kingswood Acquisition and Digital Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingswood Acquisition position performs unexpectedly, Digital Health 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 Digital Health will offset losses from the drop in Digital Health's long position.| Kingswood Acquisition vs. Insight Acquisition Corp | Kingswood Acquisition vs. ClimateRock Class A | Kingswood Acquisition vs. Valuence Merger Corp |
| Digital Health vs. Insight Acquisition Corp | Digital Health vs. AlphaVest Acquisition Corp | Digital Health vs. Oak Woods Acquisition | Digital Health vs. Insight Acquisition Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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