Correlation Between PowerUp Acquisition and Sixth Street
Can any of the company-specific risk be diversified away by investing in both PowerUp Acquisition and Sixth Street 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 Sixth Street 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 Sixth Street Specialty, you can compare the effects of market volatilities on PowerUp Acquisition and Sixth Street 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 Sixth Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and Sixth Street.
Diversification Opportunities for PowerUp Acquisition and Sixth Street
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between PowerUp and Sixth is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and Sixth Street Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixth Street Specialty 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 Sixth Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixth Street Specialty has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and Sixth Street go up and down completely randomly.
Pair Corralation between PowerUp Acquisition and Sixth Street
Given the investment horizon of 90 days PowerUp Acquisition is expected to generate 2.15 times less return on investment than Sixth Street. In addition to that, PowerUp Acquisition is 1.52 times more volatile than Sixth Street Specialty. It trades about 0.02 of its total potential returns per unit of risk. Sixth Street Specialty is currently generating about 0.07 per unit of volatility. If you would invest 1,465 in Sixth Street Specialty on August 25, 2024 and sell it today you would earn a total of 613.00 from holding Sixth Street Specialty or generate 41.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PowerUp Acquisition Corp vs. Sixth Street Specialty
Performance |
| Timeline |
| PowerUp Acquisition Corp |
| Sixth Street Specialty |
PowerUp Acquisition and Sixth Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PowerUp Acquisition and Sixth Street
The main advantage of trading using opposite PowerUp Acquisition and Sixth Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerUp Acquisition position performs unexpectedly, Sixth Street 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 Sixth Street will offset losses from the drop in Sixth Street's long position.The idea behind PowerUp Acquisition Corp and Sixth Street Specialty 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.| Sixth Street vs. PowerUp Acquisition Corp | Sixth Street vs. Aurora Innovation | Sixth Street vs. HUMANA INC | Sixth Street 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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