Correlation Between Western Union and LatAmGrowth SPAC
Can any of the company-specific risk be diversified away by investing in both Western Union and LatAmGrowth SPAC 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 Union and LatAmGrowth SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and LatAmGrowth SPAC, you can compare the effects of market volatilities on Western Union and LatAmGrowth SPAC 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 Union with a short position of LatAmGrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and LatAmGrowth SPAC.
Diversification Opportunities for Western Union and LatAmGrowth SPAC
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and LatAmGrowth is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC and Western Union 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 Union Co are associated (or correlated) with LatAmGrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LatAmGrowth SPAC has no effect on the direction of Western Union i.e., Western Union and LatAmGrowth SPAC go up and down completely randomly.
Pair Corralation between Western Union and LatAmGrowth SPAC
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the LatAmGrowth SPAC. In addition to that, Western Union is 4.97 times more volatile than LatAmGrowth SPAC. It trades about 0.0 of its total potential returns per unit of risk. LatAmGrowth SPAC is currently generating about 0.09 per unit of volatility. If you would invest 1,022 in LatAmGrowth SPAC on August 29, 2024 and sell it today you would earn a total of 146.00 from holding LatAmGrowth SPAC or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. LatAmGrowth SPAC
Performance |
| Timeline |
| Western Union |
| LatAmGrowth SPAC |
Western Union and LatAmGrowth SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and LatAmGrowth SPAC
The main advantage of trading using opposite Western Union and LatAmGrowth SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, LatAmGrowth SPAC 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 LatAmGrowth SPAC will offset losses from the drop in LatAmGrowth SPAC's long position.| Western Union vs. American Express | Western Union vs. PayPal Holdings | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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