Correlation Between A SPAC and OPY Acquisition

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

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

Diversification Opportunities for A SPAC and OPY Acquisition

0.0

Correlation Coefficient

A SPAC  OPY Acquisition

Pay attention - limited upside

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

Pair Corralation between A SPAC and OPY Acquisition

If you would invest  1,097  in A SPAC II on December 26, 2024 and sell it today you would earn a total of  13.00  from holding A SPAC II or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

A SPAC II  vs.  OPY Acquisition I

A SPAC II

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in A SPAC II are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, A SPAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

OPY Acquisition I

Risk-Adjusted Performance

Very Weak

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

Pair Trading with A SPAC and OPY Acquisition

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

The idea behind A SPAC II and OPY Acquisition 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.