Correlation Between AxonPrime Infrastructure and LatAmGrowth SPAC

Can any of the company-specific risk be diversified away by investing in both AxonPrime Infrastructure and LatAmGrowth SPAC 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 AxonPrime Infrastructure and LatAmGrowth SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for AxonPrime Infrastructure and LatAmGrowth SPAC

0.27

Correlation Coefficient

AxonPrime Infrastructure  LatAmGrowth SPAC

Modest diversification

The 3 months correlation between AxonPrime and LatAmGrowth is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AxonPrime Infrastructure Acqui and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC and AxonPrime Infrastructure 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 AxonPrime Infrastructure Acquisition are associated (or correlated) with LatAmGrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LatAmGrowth SPAC has no effect on the direction of AxonPrime Infrastructure i.e., AxonPrime Infrastructure and LatAmGrowth SPAC go up and down completely randomly.

Pair Corralation between AxonPrime Infrastructure and LatAmGrowth SPAC

Assuming the 90 days horizon AxonPrime Infrastructure Acquisition is expected to generate 0.73 times more return on investment than LatAmGrowth SPAC. However, AxonPrime Infrastructure Acquisition is 1.37 times less risky than LatAmGrowth SPAC. It trades about 0.03 of its potential returns per unit of risk. LatAmGrowth SPAC is currently generating about 0.0 per unit of risk. If you would invest  996.00  in AxonPrime Infrastructure Acquisition on October 4, 2024 and sell it today you would earn a total of  32.00  from holding AxonPrime Infrastructure Acquisition or generate 3.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	26.41%
Values	Daily Returns

AxonPrime Infrastructure Acqui  vs.  LatAmGrowth SPAC

AxonPrime Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

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

LatAmGrowth SPAC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LatAmGrowth SPAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AxonPrime Infrastructure and LatAmGrowth SPAC

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

The idea behind AxonPrime Infrastructure Acquisition and LatAmGrowth SPAC 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.