Correlation Between Newcourt Acquisition and Finnovate Acquisition
Can any of the company-specific risk be diversified away by investing in both Newcourt Acquisition and Finnovate 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 Newcourt Acquisition and Finnovate Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcourt Acquisition Corp and Finnovate Acquisition Corp, you can compare the effects of market volatilities on Newcourt Acquisition and Finnovate 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 Newcourt Acquisition with a short position of Finnovate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcourt Acquisition and Finnovate Acquisition.
Diversification Opportunities for Newcourt Acquisition and Finnovate Acquisition
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Newcourt and Finnovate is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Newcourt Acquisition Corp and Finnovate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnovate Acquisition and Newcourt 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 Newcourt Acquisition Corp are associated (or correlated) with Finnovate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnovate Acquisition has no effect on the direction of Newcourt Acquisition i.e., Newcourt Acquisition and Finnovate Acquisition go up and down completely randomly.
Pair Corralation between Newcourt Acquisition and Finnovate Acquisition
If you would invest 1,156 in Finnovate Acquisition Corp on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Finnovate Acquisition Corp or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Newcourt Acquisition Corp vs. Finnovate Acquisition Corp
Performance |
| Timeline |
| Newcourt Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Finnovate Acquisition |
Newcourt Acquisition and Finnovate Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcourt Acquisition and Finnovate Acquisition
The main advantage of trading using opposite Newcourt Acquisition and Finnovate Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcourt Acquisition position performs unexpectedly, Finnovate 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 Finnovate Acquisition will offset losses from the drop in Finnovate Acquisition's long position.The idea behind Newcourt Acquisition Corp and Finnovate Acquisition Corp 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.| Finnovate Acquisition vs. Broad Capital Acquisition | Finnovate Acquisition vs. Welsbach Technology Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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