Correlation Between Coliseum Acquisition and Jaws Hurricane
Can any of the company-specific risk be diversified away by investing in both Coliseum Acquisition and Jaws Hurricane 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 Coliseum Acquisition and Jaws Hurricane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coliseum Acquisition Corp and Jaws Hurricane Acquisition, you can compare the effects of market volatilities on Coliseum Acquisition and Jaws Hurricane 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 Coliseum Acquisition with a short position of Jaws Hurricane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coliseum Acquisition and Jaws Hurricane.
Diversification Opportunities for Coliseum Acquisition and Jaws Hurricane
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coliseum and Jaws is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coliseum Acquisition Corp and Jaws Hurricane Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaws Hurricane Acqui and Coliseum 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 Coliseum Acquisition Corp are associated (or correlated) with Jaws Hurricane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaws Hurricane Acqui has no effect on the direction of Coliseum Acquisition i.e., Coliseum Acquisition and Jaws Hurricane go up and down completely randomly.
Pair Corralation between Coliseum Acquisition and Jaws Hurricane
Assuming the 90 days horizon Coliseum Acquisition Corp is expected to generate 1.57 times more return on investment than Jaws Hurricane. However, Coliseum Acquisition is 1.57 times more volatile than Jaws Hurricane Acquisition. It trades about 0.06 of its potential returns per unit of risk. Jaws Hurricane Acquisition is currently generating about 0.02 per unit of risk. If you would invest 1,015 in Coliseum Acquisition Corp on November 5, 2024 and sell it today you would earn a total of 415.00 from holding Coliseum Acquisition Corp or generate 40.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 19.2% |
| Values | Daily Returns |
Coliseum Acquisition Corp vs. Jaws Hurricane Acquisition
Performance |
| Timeline |
| Coliseum Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Jaws Hurricane Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Coliseum Acquisition and Jaws Hurricane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coliseum Acquisition and Jaws Hurricane
The main advantage of trading using opposite Coliseum Acquisition and Jaws Hurricane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coliseum Acquisition position performs unexpectedly, Jaws Hurricane 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 Jaws Hurricane will offset losses from the drop in Jaws Hurricane's long position.The idea behind Coliseum Acquisition Corp and Jaws Hurricane 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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