Correlation Between NH SPAC and RaemongRaein

Can any of the company-specific risk be diversified away by investing in both NH SPAC and RaemongRaein 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 RaemongRaein 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 RaemongRaein Co, you can compare the effects of market volatilities on NH SPAC and RaemongRaein 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 RaemongRaein. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH SPAC and RaemongRaein.

Diversification Opportunities for NH SPAC and RaemongRaein

-0.33

Correlation Coefficient

NH SPAC  RaemongRaein

Very good diversification

The 3 months correlation between 225570 and RaemongRaein is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NH SPAC 8 and RaemongRaein Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RaemongRaein 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 RaemongRaein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RaemongRaein has no effect on the direction of NH SPAC i.e., NH SPAC and RaemongRaein go up and down completely randomly.

Pair Corralation between NH SPAC and RaemongRaein

Assuming the 90 days trading horizon NH SPAC 8 is expected to generate 0.2 times more return on investment than RaemongRaein. However, NH SPAC 8 is 5.04 times less risky than RaemongRaein. It trades about 0.08 of its potential returns per unit of risk. RaemongRaein Co is currently generating about -0.02 per unit of risk. If you would invest  1,301,000  in NH SPAC 8 on October 11, 2024 and sell it today you would earn a total of  43,000  from holding NH SPAC 8 or generate 3.31% 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.  RaemongRaein Co

NH SPAC 8

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

RaemongRaein

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RaemongRaein Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, RaemongRaein sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NH SPAC and RaemongRaein

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

The idea behind NH SPAC 8 and RaemongRaein 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.