Correlation Between Ahren Acquisition and Continental Beverage

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

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

Diversification Opportunities for Ahren Acquisition and Continental Beverage

0.0

Correlation Coefficient

Ahren Acquisition  Continental Beverage

Pay attention - limited upside

The 3 months correlation between Ahren and Continental is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ahren Acquisition Corp and Continental Beverage Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Beverage and Ahren 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 Ahren Acquisition Corp are associated (or correlated) with Continental Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Beverage has no effect on the direction of Ahren Acquisition i.e., Ahren Acquisition and Continental Beverage go up and down completely randomly.

Pair Corralation between Ahren Acquisition and Continental Beverage

If you would invest (100.00) in Continental Beverage Brands on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Continental Beverage Brands or generate -100.0% return on investment over 90 days.

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

Ahren Acquisition Corp  vs.  Continental Beverage Brands

Ahren Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ahren Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ahren Acquisition is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Continental Beverage

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Ahren Acquisition and Continental Beverage

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

The idea behind Ahren Acquisition Corp and Continental Beverage Brands 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.