Correlation Between 3M and Edify Acquisition
Can any of the company-specific risk be diversified away by investing in both 3M and Edify 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 3M and Edify Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Edify Acquisition Corp, you can compare the effects of market volatilities on 3M and Edify 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 3M with a short position of Edify Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Edify Acquisition.
Diversification Opportunities for 3M and Edify Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3M and Edify is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Edify Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edify Acquisition Corp and 3M 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 3M Company are associated (or correlated) with Edify Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edify Acquisition Corp has no effect on the direction of 3M i.e., 3M and Edify Acquisition go up and down completely randomly.
Pair Corralation between 3M and Edify Acquisition
If you would invest (100.00) in Edify Acquisition Corp on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Edify Acquisition Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
3M Company vs. Edify Acquisition Corp
Performance |
| Timeline |
| 3M Company |
| Edify Acquisition Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
3M and Edify Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Edify Acquisition
The main advantage of trading using opposite 3M and Edify Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Edify 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 Edify Acquisition will offset losses from the drop in Edify Acquisition's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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