Correlation Between Ramp Metals and FG Acquisition
Can any of the company-specific risk be diversified away by investing in both Ramp Metals and FG Acquisition 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 Ramp Metals and FG Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramp Metals and FG Acquisition Corp, you can compare the effects of market volatilities on Ramp Metals and FG Acquisition 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 Ramp Metals with a short position of FG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramp Metals and FG Acquisition.
Diversification Opportunities for Ramp Metals and FG Acquisition
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramp and FGAA-U is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ramp Metals and FG Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Acquisition Corp and Ramp Metals 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 Ramp Metals are associated (or correlated) with FG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Acquisition Corp has no effect on the direction of Ramp Metals i.e., Ramp Metals and FG Acquisition go up and down completely randomly.
Pair Corralation between Ramp Metals and FG Acquisition
Assuming the 90 days trading horizon Ramp Metals is expected to generate 38.18 times more return on investment than FG Acquisition. However, Ramp Metals is 38.18 times more volatile than FG Acquisition Corp. It trades about 0.1 of its potential returns per unit of risk. FG Acquisition Corp is currently generating about 0.18 per unit of risk. If you would invest 17.00 in Ramp Metals on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Ramp Metals or generate 311.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Ramp Metals vs. FG Acquisition Corp
Performance |
| Timeline |
| Ramp Metals |
| FG Acquisition Corp |
Ramp Metals and FG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramp Metals and FG Acquisition
The main advantage of trading using opposite Ramp Metals and FG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramp Metals position performs unexpectedly, FG Acquisition 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 FG Acquisition will offset losses from the drop in FG Acquisition's long position.| Ramp Metals vs. Teck Resources Limited | Ramp Metals vs. Ivanhoe Mines | Ramp Metals vs. Filo Mining Corp | Ramp Metals vs. Sigma Lithium Resources |
| FG Acquisition vs. Bausch Health Companies | FG Acquisition vs. Quorum Information Technologies | FG Acquisition vs. Leveljump Healthcare Corp | FG Acquisition vs. CVS HEALTH CDR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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