Correlation Between Western Union and Melar Acquisition
Can any of the company-specific risk be diversified away by investing in both Western Union and Melar 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 Western Union and Melar Acquisition 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 Melar Acquisition Corp, you can compare the effects of market volatilities on Western Union and Melar 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 Western Union with a short position of Melar Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Melar Acquisition.
Diversification Opportunities for Western Union and Melar Acquisition
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Melar is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Melar Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melar Acquisition Corp 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 Melar Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melar Acquisition Corp has no effect on the direction of Western Union i.e., Western Union and Melar Acquisition go up and down completely randomly.
Pair Corralation between Western Union and Melar Acquisition
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Melar Acquisition. In addition to that, Western Union is 9.77 times more volatile than Melar Acquisition Corp. It trades about 0.0 of its total potential returns per unit of risk. Melar Acquisition Corp is currently generating about 0.05 per unit of volatility. If you would invest 996.00 in Melar Acquisition Corp on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Melar Acquisition Corp or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 19.6% |
| Values | Daily Returns |
Western Union Co vs. Melar Acquisition Corp
Performance |
| Timeline |
| Western Union |
| Melar Acquisition Corp |
Western Union and Melar Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Melar Acquisition
The main advantage of trading using opposite Western Union and Melar Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Melar 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 Melar Acquisition will offset losses from the drop in Melar Acquisition's long position.| Western Union vs. American Express | Western Union vs. Capital One Financial | Western Union vs. Upstart Holdings | Western Union vs. Ally Financial |
| Melar Acquisition vs. Alpha One | Melar Acquisition vs. Manaris Corp | Melar Acquisition vs. SCOR PK | Melar 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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