Correlation Between ROC Energy and FG MERGER
Can any of the company-specific risk be diversified away by investing in both ROC Energy and FG MERGER 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 ROC Energy and FG MERGER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ROC Energy Acquisition and FG MERGER II, you can compare the effects of market volatilities on ROC Energy and FG MERGER 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 ROC Energy with a short position of FG MERGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ROC Energy and FG MERGER.
Diversification Opportunities for ROC Energy and FG MERGER
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ROC and FGMC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ROC Energy Acquisition and FG MERGER II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG MERGER II and ROC Energy 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 ROC Energy Acquisition are associated (or correlated) with FG MERGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG MERGER II has no effect on the direction of ROC Energy i.e., ROC Energy and FG MERGER go up and down completely randomly.
Pair Corralation between ROC Energy and FG MERGER
If you would invest (100.00) in FG MERGER II on November 28, 2024 and sell it today you would earn a total of 100.00 from holding FG MERGER II or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ROC Energy Acquisition vs. FG MERGER II
Performance |
| Timeline |
| ROC Energy Acquisition |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| FG MERGER II |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
ROC Energy and FG MERGER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ROC Energy and FG MERGER
The main advantage of trading using opposite ROC Energy and FG MERGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ROC Energy position performs unexpectedly, FG MERGER 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 MERGER will offset losses from the drop in FG MERGER's long position.The idea behind ROC Energy Acquisition and FG MERGER II 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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