Correlation Between Finnovate Acquisition and Schultze Special

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

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

Diversification Opportunities for Finnovate Acquisition and Schultze Special

0.65

Correlation Coefficient

Finnovate Acquisition  Schultze Special

Poor diversification

The 3 months correlation between Finnovate and Schultze is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Finnovate Acquisition Corp and Schultze Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schultze Special Purpose and Finnovate 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 Finnovate Acquisition Corp are associated (or correlated) with Schultze Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schultze Special Purpose has no effect on the direction of Finnovate Acquisition i.e., Finnovate Acquisition and Schultze Special go up and down completely randomly.

Pair Corralation between Finnovate Acquisition and Schultze Special

If you would invest  1,150  in Finnovate Acquisition Corp on September 4, 2024 and sell it today you would earn a total of  12.00  from holding Finnovate Acquisition Corp or generate 1.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Finnovate Acquisition Corp  vs.  Schultze Special Purpose

Finnovate Acquisition

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Finnovate Acquisition Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Finnovate Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Schultze Special Purpose

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Finnovate Acquisition and Schultze Special

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

The idea behind Finnovate Acquisition Corp and Schultze Special Purpose 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.