Correlation Between FIAC Old and FTAC Emerald

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Can any of the company-specific risk be diversified away by investing in both FIAC Old and FTAC Emerald 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 FIAC Old and FTAC Emerald into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIAC Old and FTAC Emerald Acquisition, you can compare the effects of market volatilities on FIAC Old and FTAC Emerald 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 FIAC Old with a short position of FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIAC Old and FTAC Emerald.

Diversification Opportunities for FIAC Old and FTAC Emerald

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between FIAC Old and FTAC Emerald

If you would invest (100.00) in FTAC Emerald Acquisition on November 20, 2024 and sell it today you would earn a total of  100.00  from holding FTAC Emerald Acquisition or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

FIAC Old  vs.  FTAC Emerald Acquisition

 Performance 
       Timeline  
FIAC Old 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days FIAC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FIAC Old is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
FTAC Emerald Acquisition 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days FTAC Emerald Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, FTAC Emerald is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

FIAC Old and FTAC Emerald Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with FIAC Old and FTAC Emerald

The main advantage of trading using opposite FIAC Old and FTAC Emerald positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIAC Old position performs unexpectedly, FTAC Emerald 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 FTAC Emerald will offset losses from the drop in FTAC Emerald's long position.
The idea behind FIAC Old and FTAC Emerald Acquisition 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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