Correlation Between Alset Capital and Armada Acquisition

Can any of the company-specific risk be diversified away by investing in both Alset Capital and Armada 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 Alset Capital and Armada Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alset Capital Acquisition and Armada Acquisition Corp, you can compare the effects of market volatilities on Alset Capital and Armada 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 Alset Capital with a short position of Armada Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alset Capital and Armada Acquisition.

Diversification Opportunities for Alset Capital and Armada Acquisition

-0.12

Correlation Coefficient

Alset Capital  Armada Acquisition

Good diversification

The 3 months correlation between Alset and Armada is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Alset Capital Acquisition and Armada Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Acquisition Corp and Alset Capital 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 Alset Capital Acquisition are associated (or correlated) with Armada Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Acquisition Corp has no effect on the direction of Alset Capital i.e., Alset Capital and Armada Acquisition go up and down completely randomly.

Pair Corralation between Alset Capital and Armada Acquisition

Given the investment horizon of 90 days Alset Capital is expected to generate 285.03 times less return on investment than Armada Acquisition. But when comparing it to its historical volatility, Alset Capital Acquisition is 85.33 times less risky than Armada Acquisition. It trades about 0.03 of its potential returns per unit of risk. Armada Acquisition Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Armada Acquisition Corp on October 26, 2024 and sell it today you would lose (11.00) from holding Armada Acquisition Corp or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.07%
Values	Daily Returns

Alset Capital Acquisition  vs.  Armada Acquisition Corp

Alset Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alset Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Alset Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Armada Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Armada Acquisition is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Alset Capital and Armada Acquisition

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

The idea behind Alset Capital Acquisition and Armada Acquisition Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..