Correlation Between Stonebridge Acquisition and TTEC Holdings

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

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

Diversification Opportunities for Stonebridge Acquisition and TTEC Holdings

0.3

Correlation Coefficient

Stonebridge Acquisition  TTEC Holdings

Weak diversification

The 3 months correlation between Stonebridge and TTEC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Stonebridge Acquisition Corp and TTEC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTEC Holdings and Stonebridge 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 Stonebridge Acquisition Corp are associated (or correlated) with TTEC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTEC Holdings has no effect on the direction of Stonebridge Acquisition i.e., Stonebridge Acquisition and TTEC Holdings go up and down completely randomly.

Pair Corralation between Stonebridge Acquisition and TTEC Holdings

If you would invest  435.00  in TTEC Holdings on September 15, 2024 and sell it today you would earn a total of  85.00  from holding TTEC Holdings or generate 19.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Stonebridge Acquisition Corp  vs.  TTEC Holdings

Stonebridge Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stonebridge Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Stonebridge Acquisition is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

TTEC Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TTEC Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, TTEC Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stonebridge Acquisition and TTEC Holdings

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

The idea behind Stonebridge Acquisition Corp and TTEC Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.