Correlation Between TKB Critical and Concord Acquisition
Can any of the company-specific risk be diversified away by investing in both TKB Critical and Concord 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 TKB Critical and Concord Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKB Critical Technologies and Concord Acquisition Corp, you can compare the effects of market volatilities on TKB Critical and Concord 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 TKB Critical with a short position of Concord Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKB Critical and Concord Acquisition.
Diversification Opportunities for TKB Critical and Concord Acquisition
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between TKB and Concord is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding TKB Critical Technologies and Concord Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Acquisition Corp and TKB Critical 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 TKB Critical Technologies are associated (or correlated) with Concord Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Acquisition Corp has no effect on the direction of TKB Critical i.e., TKB Critical and Concord Acquisition go up and down completely randomly.
Pair Corralation between TKB Critical and Concord Acquisition
Assuming the 90 days horizon TKB Critical Technologies is expected to generate 3988.35 times more return on investment than Concord Acquisition. However, TKB Critical is 3988.35 times more volatile than Concord Acquisition Corp. It trades about 0.13 of its potential returns per unit of risk. Concord Acquisition Corp is currently generating about 0.1 per unit of risk. If you would invest 2.99 in TKB Critical Technologies on September 1, 2024 and sell it today you would lose (1.89) from holding TKB Critical Technologies or give up 63.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 21.43% |
| Values | Daily Returns |
TKB Critical Technologies vs. Concord Acquisition Corp
Performance |
| Timeline |
| TKB Critical Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Concord Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TKB Critical and Concord Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKB Critical and Concord Acquisition
The main advantage of trading using opposite TKB Critical and Concord Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKB Critical position performs unexpectedly, Concord 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 Concord Acquisition will offset losses from the drop in Concord Acquisition's long position.The idea behind TKB Critical Technologies and Concord Acquisition Corp 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.| Concord Acquisition vs. Thunder Bridge Capital | Concord Acquisition vs. Welsbach Technology Metals | Concord Acquisition vs. Hudson Acquisition I | Concord 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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