Correlation Between RMG Acquisition and Mitesco
Can any of the company-specific risk be diversified away by investing in both RMG Acquisition and Mitesco 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 Mitesco 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 Mitesco, you can compare the effects of market volatilities on RMG Acquisition and Mitesco 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 Mitesco. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMG Acquisition and Mitesco.
Diversification Opportunities for RMG Acquisition and Mitesco
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RMG and Mitesco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding RMG Acquisition Corp and Mitesco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitesco 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 Mitesco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitesco has no effect on the direction of RMG Acquisition i.e., RMG Acquisition and Mitesco go up and down completely randomly.
Pair Corralation between RMG Acquisition and Mitesco
Assuming the 90 days horizon RMG Acquisition Corp is expected to under-perform the Mitesco. But the stock apears to be less risky and, when comparing its historical volatility, RMG Acquisition Corp is 25.69 times less risky than Mitesco. The stock trades about -0.04 of its potential returns per unit of risk. The Mitesco is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Mitesco on August 26, 2024 and sell it today you would lose (20.00) from holding Mitesco or give up 40.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.57% |
| Values | Daily Returns |
RMG Acquisition Corp vs. Mitesco
Performance |
| Timeline |
| RMG Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mitesco |
RMG Acquisition and Mitesco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMG Acquisition and Mitesco
The main advantage of trading using opposite RMG Acquisition and Mitesco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMG Acquisition position performs unexpectedly, Mitesco 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 Mitesco will offset losses from the drop in Mitesco's long position.| RMG Acquisition vs. Kinetik Holdings | RMG Acquisition vs. WPP PLC ADR | RMG Acquisition vs. Marchex | RMG Acquisition vs. Atmos Energy |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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