Correlation Between Generation Asia and Jackson Acquisition

Can any of the company-specific risk be diversified away by investing in both Generation Asia and Jackson 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 Jackson 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 Jackson Acquisition Co, you can compare the effects of market volatilities on Generation Asia and Jackson 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 Jackson Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Asia and Jackson Acquisition.

Diversification Opportunities for Generation Asia and Jackson Acquisition

0.51

Correlation Coefficient

Generation Asia  Jackson Acquisition

Very weak diversification

The 3 months correlation between Generation and Jackson is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Generation Asia I and Jackson Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Acquisition 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 Jackson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Acquisition has no effect on the direction of Generation Asia i.e., Generation Asia and Jackson Acquisition go up and down completely randomly.

Pair Corralation between Generation Asia and Jackson Acquisition

Considering the 90-day investment horizon Generation Asia I is expected to generate 3.66 times more return on investment than Jackson Acquisition. However, Generation Asia is 3.66 times more volatile than Jackson Acquisition Co. It trades about 0.04 of its potential returns per unit of risk. Jackson Acquisition Co is currently generating about 0.15 per unit of risk. If you would invest  1,002  in Generation Asia I on September 4, 2024 and sell it today you would earn a total of  138.00  from holding Generation Asia I or generate 13.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	25.78%
Values	Daily Returns

Generation Asia I  vs.  Jackson Acquisition Co

Generation Asia I

Risk-Adjusted Performance

0 of 100

Good

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.

Jackson Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Generation Asia and Jackson Acquisition

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

The idea behind Generation Asia I and Jackson Acquisition Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.