Correlation Between NH SPAC and Y Optics

Can any of the company-specific risk be diversified away by investing in both NH SPAC and Y Optics 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 NH SPAC and Y Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NH SPAC 8 and Y Optics Manufacture Co, you can compare the effects of market volatilities on NH SPAC and Y Optics 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 NH SPAC with a short position of Y Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH SPAC and Y Optics.

Diversification Opportunities for NH SPAC and Y Optics

-0.16

Correlation Coefficient

NH SPAC  Y Optics

Good diversification

The 3 months correlation between 225570 and 066430 is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NH SPAC 8 and Y Optics Manufacture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Y Optics Manufacture and NH SPAC 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 NH SPAC 8 are associated (or correlated) with Y Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Y Optics Manufacture has no effect on the direction of NH SPAC i.e., NH SPAC and Y Optics go up and down completely randomly.

Pair Corralation between NH SPAC and Y Optics

Assuming the 90 days trading horizon NH SPAC 8 is expected to under-perform the Y Optics. But the stock apears to be less risky and, when comparing its historical volatility, NH SPAC 8 is 1.56 times less risky than Y Optics. The stock trades about -0.04 of its potential returns per unit of risk. The Y Optics Manufacture Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  54,100  in Y Optics Manufacture Co on December 23, 2024 and sell it today you would earn a total of  34,300  from holding Y Optics Manufacture Co or generate 63.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NH SPAC 8  vs.  Y Optics Manufacture Co

NH SPAC 8

Risk-Adjusted Performance

Very Weak

Over the last 90 days NH SPAC 8 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NH SPAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Y Optics Manufacture

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Y Optics Manufacture Co are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Y Optics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NH SPAC and Y Optics

The main advantage of trading using opposite NH SPAC and Y Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH SPAC position performs unexpectedly, Y Optics 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 Y Optics will offset losses from the drop in Y Optics' long position.

The idea behind NH SPAC 8 and Y Optics Manufacture Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.