Correlation Between YHN Acquisition and Patria Latin
Can any of the company-specific risk be diversified away by investing in both YHN Acquisition and Patria Latin 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 YHN Acquisition and Patria Latin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YHN Acquisition I and Patria Latin American, you can compare the effects of market volatilities on YHN Acquisition and Patria Latin 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 YHN Acquisition with a short position of Patria Latin. Check out your portfolio center. Please also check ongoing floating volatility patterns of YHN Acquisition and Patria Latin.
Diversification Opportunities for YHN Acquisition and Patria Latin
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between YHN and Patria is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I and Patria Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Latin American and YHN 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 YHN Acquisition I are associated (or correlated) with Patria Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Latin American has no effect on the direction of YHN Acquisition i.e., YHN Acquisition and Patria Latin go up and down completely randomly.
Pair Corralation between YHN Acquisition and Patria Latin
Assuming the 90 days horizon YHN Acquisition I is expected to generate 0.5 times more return on investment than Patria Latin. However, YHN Acquisition I is 2.01 times less risky than Patria Latin. It trades about 0.15 of its potential returns per unit of risk. Patria Latin American is currently generating about 0.05 per unit of risk. If you would invest 1,000.00 in YHN Acquisition I on September 1, 2024 and sell it today you would earn a total of 13.00 from holding YHN Acquisition I or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.16% |
| Values | Daily Returns |
YHN Acquisition I vs. Patria Latin American
Performance |
| Timeline |
| YHN Acquisition I |
| Patria Latin American |
YHN Acquisition and Patria Latin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YHN Acquisition and Patria Latin
The main advantage of trading using opposite YHN Acquisition and Patria Latin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YHN Acquisition position performs unexpectedly, Patria Latin 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 Patria Latin will offset losses from the drop in Patria Latin's long position.| YHN Acquisition vs. Voyager Acquisition Corp | YHN Acquisition vs. CO2 Energy Transition | YHN Acquisition vs. Vine Hill Capital | YHN Acquisition vs. DUET Acquisition Corp |
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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