Correlation Between PowerUp Acquisition and Cohen
Can any of the company-specific risk be diversified away by investing in both PowerUp Acquisition and Cohen 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 Cohen 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 Cohen Company, you can compare the effects of market volatilities on PowerUp Acquisition and Cohen 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 Cohen. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and Cohen.
Diversification Opportunities for PowerUp Acquisition and Cohen
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PowerUp and Cohen is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and Cohen Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Company 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 Cohen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Company has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and Cohen go up and down completely randomly.
Pair Corralation between PowerUp Acquisition and Cohen
Assuming the 90 days horizon PowerUp Acquisition is expected to generate 1.79 times less return on investment than Cohen. In addition to that, PowerUp Acquisition is 3.8 times more volatile than Cohen Company. It trades about 0.03 of its total potential returns per unit of risk. Cohen Company is currently generating about 0.23 per unit of volatility. If you would invest 814.00 in Cohen Company on August 29, 2024 and sell it today you would earn a total of 201.00 from holding Cohen Company or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.87% |
| Values | Daily Returns |
PowerUp Acquisition Corp vs. Cohen Company
Performance |
| Timeline |
| PowerUp Acquisition Corp |
| Cohen Company |
PowerUp Acquisition and Cohen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PowerUp Acquisition and Cohen
The main advantage of trading using opposite PowerUp Acquisition and Cohen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PowerUp Acquisition position performs unexpectedly, Cohen 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 Cohen will offset losses from the drop in Cohen's long position.The idea behind PowerUp Acquisition Corp and Cohen Company 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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