Correlation Between New Providence and Goal Acquisitions
Can any of the company-specific risk be diversified away by investing in both New Providence and Goal Acquisitions 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 New Providence and Goal Acquisitions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Providence Acquisition and Goal Acquisitions Corp, you can compare the effects of market volatilities on New Providence and Goal Acquisitions 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 New Providence with a short position of Goal Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Providence and Goal Acquisitions.
Diversification Opportunities for New Providence and Goal Acquisitions
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Goal is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding New Providence Acquisition and Goal Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goal Acquisitions Corp and New Providence 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 New Providence Acquisition are associated (or correlated) with Goal Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goal Acquisitions Corp has no effect on the direction of New Providence i.e., New Providence and Goal Acquisitions go up and down completely randomly.
Pair Corralation between New Providence and Goal Acquisitions
Assuming the 90 days horizon New Providence Acquisition is expected to generate 6.47 times more return on investment than Goal Acquisitions. However, New Providence is 6.47 times more volatile than Goal Acquisitions Corp. It trades about 0.12 of its potential returns per unit of risk. Goal Acquisitions Corp is currently generating about 0.06 per unit of risk. If you would invest 2.01 in New Providence Acquisition on September 4, 2024 and sell it today you would earn a total of 1.99 from holding New Providence Acquisition or generate 99.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.53% |
| Values | Daily Returns |
New Providence Acquisition vs. Goal Acquisitions Corp
Performance |
| Timeline |
| New Providence Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Goal Acquisitions Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
New Providence and Goal Acquisitions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Providence and Goal Acquisitions
The main advantage of trading using opposite New Providence and Goal Acquisitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Providence position performs unexpectedly, Goal Acquisitions 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 Goal Acquisitions will offset losses from the drop in Goal Acquisitions' long position.The idea behind New Providence Acquisition and Goal Acquisitions 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.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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