Correlation Between Broad Capital and Up Fintech

Can any of the company-specific risk be diversified away by investing in both Broad Capital and Up Fintech 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 Broad Capital and Up Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Broad Capital Acquisition and Up Fintech Holding, you can compare the effects of market volatilities on Broad Capital and Up Fintech 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 Broad Capital with a short position of Up Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and Up Fintech.

Diversification Opportunities for Broad Capital and Up Fintech

-0.54

Correlation Coefficient

Broad Capital  Up Fintech

Excellent diversification

The 3 months correlation between Broad and TIGR is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and Up Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Up Fintech Holding and Broad Capital 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 Broad Capital Acquisition are associated (or correlated) with Up Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Up Fintech Holding has no effect on the direction of Broad Capital i.e., Broad Capital and Up Fintech go up and down completely randomly.

Pair Corralation between Broad Capital and Up Fintech

Assuming the 90 days horizon Broad Capital Acquisition is expected to under-perform the Up Fintech. But the stock apears to be less risky and, when comparing its historical volatility, Broad Capital Acquisition is 9.67 times less risky than Up Fintech. The stock trades about -0.13 of its potential returns per unit of risk. The Up Fintech Holding is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  365.00  in Up Fintech Holding on September 2, 2024 and sell it today you would earn a total of  214.00  from holding Up Fintech Holding or generate 58.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Broad Capital Acquisition  vs.  Up Fintech Holding

Broad Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broad Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Up Fintech Holding

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Up Fintech Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Up Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broad Capital and Up Fintech

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

The idea behind Broad Capital Acquisition and Up Fintech Holding 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.