Correlation Between PowerUp Acquisition and Rand Capital
Can any of the company-specific risk be diversified away by investing in both PowerUp Acquisition and Rand Capital 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 PowerUp Acquisition and Rand Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PowerUp Acquisition Corp and Rand Capital Corp, you can compare the effects of market volatilities on PowerUp Acquisition and Rand Capital 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 PowerUp Acquisition with a short position of Rand Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and Rand Capital.
Diversification Opportunities for PowerUp Acquisition and Rand Capital
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PowerUp and Rand is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and Rand Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Capital Corp and PowerUp 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 PowerUp Acquisition Corp are associated (or correlated) with Rand Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Capital Corp has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and Rand Capital go up and down completely randomly.
Pair Corralation between PowerUp Acquisition and Rand Capital
Given the investment horizon of 90 days PowerUp Acquisition is expected to generate 2.63 times less return on investment than Rand Capital. But when comparing it to its historical volatility, PowerUp Acquisition Corp is 1.19 times less risky than Rand Capital. It trades about 0.02 of its potential returns per unit of risk. Rand Capital Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Rand Capital Corp on August 27, 2024 and sell it today you would earn a total of 433.00 from holding Rand Capital Corp or generate 36.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.88% |
| Values | Daily Returns |
PowerUp Acquisition Corp vs. Rand Capital Corp
Performance |
| Timeline |
| PowerUp Acquisition Corp |
| Rand Capital Corp |
PowerUp Acquisition and Rand Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PowerUp Acquisition and Rand Capital
The main advantage of trading using opposite PowerUp Acquisition and Rand Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerUp Acquisition position performs unexpectedly, Rand Capital 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 Rand Capital will offset losses from the drop in Rand Capital's long position.The idea behind PowerUp Acquisition Corp and Rand Capital 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.| Rand Capital vs. PowerUp Acquisition Corp | Rand Capital vs. Aurora Innovation | Rand Capital vs. HUMANA INC | Rand Capital vs. Aquagold International |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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