Correlation Between Generation Asia and Ahren Acquisition

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

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

Diversification Opportunities for Generation Asia and Ahren Acquisition

0.31

Correlation Coefficient

Generation Asia  Ahren Acquisition

Weak diversification

The 3 months correlation between Generation and Ahren is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Generation Asia I and Ahren Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ahren Acquisition Corp and Generation Asia 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 Generation Asia I are associated (or correlated) with Ahren Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ahren Acquisition Corp has no effect on the direction of Generation Asia i.e., Generation Asia and Ahren Acquisition go up and down completely randomly.

Pair Corralation between Generation Asia and Ahren Acquisition

If you would invest  1,049  in Ahren Acquisition Corp on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Ahren Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Generation Asia I  vs.  Ahren Acquisition Corp

Generation Asia I

Risk-Adjusted Performance

0 of 100

Solid

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

Ahren Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ahren Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ahren Acquisition is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Generation Asia and Ahren Acquisition

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

The idea behind Generation Asia I and Ahren 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.

Check out your portfolio center.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.