Correlation Between RMG Acquisition and Hudson Acquisition
Can any of the company-specific risk be diversified away by investing in both RMG Acquisition and Hudson 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 RMG Acquisition and Hudson Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMG Acquisition Corp and Hudson Acquisition I, you can compare the effects of market volatilities on RMG Acquisition and Hudson 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 RMG Acquisition with a short position of Hudson Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMG Acquisition and Hudson Acquisition.
Diversification Opportunities for RMG Acquisition and Hudson Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RMG and Hudson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RMG Acquisition Corp and Hudson Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Acquisition and RMG 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 RMG Acquisition Corp are associated (or correlated) with Hudson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Acquisition has no effect on the direction of RMG Acquisition i.e., RMG Acquisition and Hudson Acquisition go up and down completely randomly.
Pair Corralation between RMG Acquisition and Hudson Acquisition
Given the investment horizon of 90 days RMG Acquisition Corp is expected to under-perform the Hudson Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, RMG Acquisition Corp is 4.12 times less risky than Hudson Acquisition. The stock trades about -0.01 of its potential returns per unit of risk. The Hudson Acquisition I is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Hudson Acquisition I on September 5, 2024 and sell it today you would earn a total of 330.00 from holding Hudson Acquisition I or generate 32.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.05% |
| Values | Daily Returns |
RMG Acquisition Corp vs. Hudson Acquisition I
Performance |
| Timeline |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hudson Acquisition |
RMG Acquisition and Hudson Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMG Acquisition and Hudson Acquisition
The main advantage of trading using opposite RMG Acquisition and Hudson Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMG Acquisition position performs unexpectedly, Hudson 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 Hudson Acquisition will offset losses from the drop in Hudson Acquisition's long position.| RMG Acquisition vs. Hudson Acquisition I | RMG Acquisition vs. Alpha One | RMG Acquisition vs. Manaris Corp | RMG Acquisition 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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