Correlation Between PepperLime Health and New Providence
Can any of the company-specific risk be diversified away by investing in both PepperLime Health and New Providence 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 PepperLime Health and New Providence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PepperLime Health Acquisition and New Providence Acquisition, you can compare the effects of market volatilities on PepperLime Health and New Providence 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 PepperLime Health with a short position of New Providence. Check out your portfolio center. Please also check ongoing floating volatility patterns of PepperLime Health and New Providence.
Diversification Opportunities for PepperLime Health and New Providence
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between PepperLime and New is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PepperLime Health Acquisition and New Providence Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Providence Acqui and PepperLime Health 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 PepperLime Health Acquisition are associated (or correlated) with New Providence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Providence Acqui has no effect on the direction of PepperLime Health i.e., PepperLime Health and New Providence go up and down completely randomly.
Pair Corralation between PepperLime Health and New Providence
If you would invest 4.00 in New Providence Acquisition on October 7, 2024 and sell it today you would earn a total of 0.00 from holding New Providence Acquisition or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PepperLime Health Acquisition vs. New Providence Acquisition
Performance |
| Timeline |
| PepperLime Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| New Providence Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
PepperLime Health and New Providence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PepperLime Health and New Providence
The main advantage of trading using opposite PepperLime Health and New Providence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PepperLime Health position performs unexpectedly, New Providence 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 New Providence will offset losses from the drop in New Providence's long position.| PepperLime Health vs. Hudson Acquisition I | PepperLime Health vs. Alpha One | PepperLime Health vs. Manaris Corp | PepperLime Health vs. Marblegate Acquisition Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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