Correlation Between Nova Vision and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both Nova Vision and IB 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 Nova Vision and IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Vision Acquisition and IB Acquisition Corp, you can compare the effects of market volatilities on Nova Vision and IB 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 Nova Vision with a short position of IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Vision and IB Acquisition.
Diversification Opportunities for Nova Vision and IB Acquisition
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nova and IBACR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nova Vision Acquisition and IB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IB Acquisition Corp and Nova Vision 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 Nova Vision Acquisition are associated (or correlated) with IB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IB Acquisition Corp has no effect on the direction of Nova Vision i.e., Nova Vision and IB Acquisition go up and down completely randomly.
Pair Corralation between Nova Vision and IB Acquisition
Assuming the 90 days horizon Nova Vision Acquisition is expected to generate 1.02 times more return on investment than IB Acquisition. However, Nova Vision is 1.02 times more volatile than IB Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. IB Acquisition Corp is currently generating about 0.03 per unit of risk. If you would invest 1,169 in Nova Vision Acquisition on September 14, 2024 and sell it today you would earn a total of 2,931 from holding Nova Vision Acquisition or generate 250.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.73% |
| Values | Daily Returns |
Nova Vision Acquisition vs. IB Acquisition Corp
Performance |
| Timeline |
| Nova Vision Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| IB Acquisition Corp |
Nova Vision and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Vision and IB Acquisition
The main advantage of trading using opposite Nova Vision and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Vision position performs unexpectedly, IB 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 IB Acquisition will offset losses from the drop in IB Acquisition's long position.| Nova Vision vs. National CineMedia | Nova Vision vs. WPP PLC ADR | Nova Vision vs. Olympic Steel | Nova Vision vs. Dolphin Entertainment |
| IB Acquisition vs. Perseus Mining Limited | IB Acquisition vs. Mesa Air Group | IB Acquisition vs. HF Sinclair Corp | IB Acquisition vs. Westinghouse Air Brake |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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