Correlation Between Marblegate Acquisition and Malacca Straits

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

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

Diversification Opportunities for Marblegate Acquisition and Malacca Straits

0.46

Correlation Coefficient

Marblegate Acquisition  Malacca Straits

Very weak diversification

The 3 months correlation between Marblegate and Malacca is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Marblegate Acquisition Corp and Malacca Straits Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malacca Straits Acqu and Marblegate 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 Marblegate Acquisition Corp are associated (or correlated) with Malacca Straits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malacca Straits Acqu has no effect on the direction of Marblegate Acquisition i.e., Marblegate Acquisition and Malacca Straits go up and down completely randomly.

Pair Corralation between Marblegate Acquisition and Malacca Straits

If you would invest  1,109  in Marblegate Acquisition Corp on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Marblegate Acquisition Corp or generate 0.36% return on investment over 90 days.

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

Marblegate Acquisition Corp  vs.  Malacca Straits Acquisition

Marblegate Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Malacca Straits Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Marblegate Acquisition and Malacca Straits

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

The idea behind Marblegate Acquisition Corp and Malacca Straits 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.