Correlation Between Western Acquisition and Screaming Eagle
Can any of the company-specific risk be diversified away by investing in both Western Acquisition and Screaming Eagle 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 Western Acquisition and Screaming Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Screaming Eagle Acquisition, you can compare the effects of market volatilities on Western Acquisition and Screaming Eagle 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 Western Acquisition with a short position of Screaming Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Screaming Eagle.
Diversification Opportunities for Western Acquisition and Screaming Eagle
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Screaming is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Screaming Eagle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Screaming Eagle Acqu and Western 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 Western Acquisition Ventures are associated (or correlated) with Screaming Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Screaming Eagle Acqu has no effect on the direction of Western Acquisition i.e., Western Acquisition and Screaming Eagle go up and down completely randomly.
Pair Corralation between Western Acquisition and Screaming Eagle
Given the investment horizon of 90 days Western Acquisition Ventures is expected to generate 11.82 times more return on investment than Screaming Eagle. However, Western Acquisition is 11.82 times more volatile than Screaming Eagle Acquisition. It trades about 0.02 of its potential returns per unit of risk. Screaming Eagle Acquisition is currently generating about 0.21 per unit of risk. If you would invest 1,008 in Western Acquisition Ventures on August 26, 2024 and sell it today you would earn a total of 97.00 from holding Western Acquisition Ventures or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.79% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Screaming Eagle Acquisition
Performance |
| Timeline |
| Western Acquisition |
| Screaming Eagle Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Acquisition and Screaming Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Screaming Eagle
The main advantage of trading using opposite Western Acquisition and Screaming Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition position performs unexpectedly, Screaming Eagle 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 Screaming Eagle will offset losses from the drop in Screaming Eagle's long position.| Western Acquisition vs. PowerUp Acquisition Corp | Western Acquisition vs. Aurora Innovation | Western Acquisition vs. HUMANA INC | Western Acquisition vs. Aquagold International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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