Correlation Between American Acquisition and Oceantech Acquisitions

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

By analyzing existing cross correlation between American Acquisition Opportunity and Oceantech Acquisitions I, you can compare the effects of market volatilities on American Acquisition and Oceantech Acquisitions 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 American Acquisition with a short position of Oceantech Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Acquisition and Oceantech Acquisitions.

Diversification Opportunities for American Acquisition and Oceantech Acquisitions

0.0

Correlation Coefficient

American Acquisition  Oceantech Acquisitions

Pay attention - limited upside

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

Pair Corralation between American Acquisition and Oceantech Acquisitions

If you would invest  1,069  in Oceantech Acquisitions I on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Oceantech Acquisitions I or generate 0.0% return on investment over 90 days.

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

American Acquisition Opportuni  vs.  Oceantech Acquisitions I

American Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oceantech Acquisitions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oceantech Acquisitions I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Oceantech Acquisitions is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with American Acquisition and Oceantech Acquisitions

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

The idea behind American Acquisition Opportunity and Oceantech Acquisitions I 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.