Correlation Between Embrace Change and ACAB Old

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

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

Diversification Opportunities for Embrace Change and ACAB Old

0.0

Correlation Coefficient

Embrace Change  ACAB Old

Pay attention - limited upside

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

Pair Corralation between Embrace Change and ACAB Old

If you would invest  2.77  in Embrace Change Acquisition on December 19, 2024 and sell it today you would earn a total of  1.88  from holding Embrace Change Acquisition or generate 67.87% return on investment over 90 days.

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

Embrace Change Acquisition  vs.  ACAB Old

Embrace Change Acqui

Risk-Adjusted Performance

Solid

Over the last 90 days Embrace Change Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile technical and fundamental indicators, Embrace Change showed solid returns over the last few months and may actually be approaching a breakup point.

ACAB Old

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Embrace Change and ACAB Old

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

The idea behind Embrace Change Acquisition and ACAB 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.