Correlation Between Concord Acquisition and Blockchain Industries

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

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

Diversification Opportunities for Concord Acquisition and Blockchain Industries

0.29

Correlation Coefficient

Concord Acquisition  Blockchain Industries

Modest diversification

The 3 months correlation between Concord and Blockchain is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Concord Acquisition Corp and Blockchain Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Industries and Concord 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 Concord Acquisition Corp are associated (or correlated) with Blockchain Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Industries has no effect on the direction of Concord Acquisition i.e., Concord Acquisition and Blockchain Industries go up and down completely randomly.

Pair Corralation between Concord Acquisition and Blockchain Industries

Given the investment horizon of 90 days Concord Acquisition is expected to generate 122.47 times less return on investment than Blockchain Industries. But when comparing it to its historical volatility, Concord Acquisition Corp is 200.84 times less risky than Blockchain Industries. It trades about 0.11 of its potential returns per unit of risk. Blockchain Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4.90  in Blockchain Industries on September 17, 2024 and sell it today you would lose (2.50) from holding Blockchain Industries or give up 51.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	22.42%
Values	Daily Returns

Concord Acquisition Corp  vs.  Blockchain Industries

Concord Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Blockchain Industries

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Blockchain Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concord Acquisition and Blockchain Industries

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

The idea behind Concord Acquisition Corp and Blockchain Industries 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.