Correlation Between Four Leaf and Senior Connect

Can any of the company-specific risk be diversified away by investing in both Four Leaf and Senior Connect 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 Four Leaf and Senior Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Four Leaf and Senior Connect

0.0

Correlation Coefficient

Four Leaf  Senior Connect

Pay attention - limited upside

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

Pair Corralation between Four Leaf and Senior Connect

Assuming the 90 days horizon Four Leaf Acquisition is expected to generate 0.79 times more return on investment than Senior Connect. However, Four Leaf Acquisition is 1.27 times less risky than Senior Connect. It trades about 0.06 of its potential returns per unit of risk. Senior Connect Acquisition is currently generating about 0.03 per unit of risk. If you would invest  1,000.00  in Four Leaf Acquisition on October 2, 2024 and sell it today you would earn a total of  104.00  from holding Four Leaf Acquisition or generate 10.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	24.34%
Values	Daily Returns

Four Leaf Acquisition  vs.  Senior Connect Acquisition

Four Leaf Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Four Leaf Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Four Leaf is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Senior Connect Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senior Connect Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Senior Connect is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Four Leaf and Senior Connect

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

The idea behind Four Leaf Acquisition and Senior Connect 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.