Correlation Between VMG Consumer and ExcelFin Acquisition
Can any of the company-specific risk be diversified away by investing in both VMG Consumer and ExcelFin 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 VMG Consumer and ExcelFin Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VMG Consumer Acquisition and ExcelFin Acquisition Corp, you can compare the effects of market volatilities on VMG Consumer and ExcelFin 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 VMG Consumer with a short position of ExcelFin Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of VMG Consumer and ExcelFin Acquisition.
Diversification Opportunities for VMG Consumer and ExcelFin Acquisition
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VMG and ExcelFin is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding VMG Consumer Acquisition and ExcelFin Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExcelFin Acquisition Corp and VMG Consumer 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 VMG Consumer Acquisition are associated (or correlated) with ExcelFin Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExcelFin Acquisition Corp has no effect on the direction of VMG Consumer i.e., VMG Consumer and ExcelFin Acquisition go up and down completely randomly.
Pair Corralation between VMG Consumer and ExcelFin Acquisition
If you would invest 1,060 in ExcelFin Acquisition Corp on August 29, 2024 and sell it today you would earn a total of 0.00 from holding ExcelFin Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VMG Consumer Acquisition vs. ExcelFin Acquisition Corp
Performance |
| Timeline |
| VMG Consumer Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ExcelFin Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
VMG Consumer and ExcelFin Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VMG Consumer and ExcelFin Acquisition
The main advantage of trading using opposite VMG Consumer and ExcelFin Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VMG Consumer position performs unexpectedly, ExcelFin 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 ExcelFin Acquisition will offset losses from the drop in ExcelFin Acquisition's long position.The idea behind VMG Consumer Acquisition and ExcelFin 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.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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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