Correlation Between Aquaron Acquisition and TENK Old

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

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

Diversification Opportunities for Aquaron Acquisition and TENK Old

0.55

Correlation Coefficient

Aquaron Acquisition  TENK Old

Very weak diversification

The 3 months correlation between Aquaron and TENK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aquaron Acquisition Corp and TENK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TENK Old and Aquaron 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 Aquaron Acquisition Corp are associated (or correlated) with TENK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TENK Old has no effect on the direction of Aquaron Acquisition i.e., Aquaron Acquisition and TENK Old go up and down completely randomly.

Pair Corralation between Aquaron Acquisition and TENK Old

Considering the 90-day investment horizon Aquaron Acquisition is expected to generate 13.18 times less return on investment than TENK Old. But when comparing it to its historical volatility, Aquaron Acquisition Corp is 20.94 times less risky than TENK Old. It trades about 0.05 of its potential returns per unit of risk. TENK Old is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,021  in TENK Old on October 23, 2024 and sell it today you would lose (701.00) from holding TENK Old or give up 68.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	77.98%
Values	Daily Returns

Aquaron Acquisition Corp  vs.  TENK Old

Aquaron Acquisition Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aquaron Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Aquaron Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

TENK Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TENK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, TENK Old is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Aquaron Acquisition and TENK Old

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

The idea behind Aquaron Acquisition Corp and TENK Old 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.