Correlation Between Fintech Ecosystem and WinVest Acquisition

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

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

Diversification Opportunities for Fintech Ecosystem and WinVest Acquisition

0.28

Correlation Coefficient

Fintech Ecosystem  WinVest Acquisition

Modest diversification

The 3 months correlation between Fintech and WinVest is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fintech Ecosystem Development and WinVest Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WinVest Acquisition Corp and Fintech Ecosystem 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 Fintech Ecosystem Development are associated (or correlated) with WinVest Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WinVest Acquisition Corp has no effect on the direction of Fintech Ecosystem i.e., Fintech Ecosystem and WinVest Acquisition go up and down completely randomly.

Pair Corralation between Fintech Ecosystem and WinVest Acquisition

Assuming the 90 days horizon Fintech Ecosystem Development is expected to generate 1.47 times more return on investment than WinVest Acquisition. However, Fintech Ecosystem is 1.47 times more volatile than WinVest Acquisition Corp. It trades about 0.24 of its potential returns per unit of risk. WinVest Acquisition Corp is currently generating about 0.17 per unit of risk. If you would invest  12.00  in Fintech Ecosystem Development on October 9, 2024 and sell it today you would lose (11.62) from holding Fintech Ecosystem Development or give up 96.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	36.08%
Values	Daily Returns

Fintech Ecosystem Development  vs.  WinVest Acquisition Corp

Fintech Ecosystem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fintech Ecosystem Development has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Fintech Ecosystem is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

WinVest Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WinVest Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Fintech Ecosystem and WinVest Acquisition

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

The idea behind Fintech Ecosystem Development and WinVest Acquisition Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.