Correlation Between Western Union and PowerUp Acquisition
Can any of the company-specific risk be diversified away by investing in both Western Union and PowerUp 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 PowerUp 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 PowerUp Acquisition Corp, you can compare the effects of market volatilities on Western Union and PowerUp 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 PowerUp Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and PowerUp Acquisition.
Diversification Opportunities for Western Union and PowerUp Acquisition
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and PowerUp is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and PowerUp Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerUp 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 PowerUp Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerUp Acquisition Corp has no effect on the direction of Western Union i.e., Western Union and PowerUp Acquisition go up and down completely randomly.
Pair Corralation between Western Union and PowerUp Acquisition
Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.06 times more return on investment than PowerUp Acquisition. However, Western Union Co is 15.54 times less risky than PowerUp Acquisition. It trades about -0.14 of its potential returns per unit of risk. PowerUp Acquisition Corp is currently generating about -0.08 per unit of risk. If you would invest 1,193 in Western Union Co on August 30, 2024 and sell it today you would lose (91.00) from holding Western Union Co or give up 7.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
Western Union Co vs. PowerUp Acquisition Corp
Performance |
| Timeline |
| Western Union |
| PowerUp Acquisition Corp |
Western Union and PowerUp Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and PowerUp Acquisition
The main advantage of trading using opposite Western Union and PowerUp Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, PowerUp 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 PowerUp Acquisition will offset losses from the drop in PowerUp Acquisition's long position.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
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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 Stocks Directory module to find actively traded stocks across global markets.
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