Correlation Between Home Plate and ADS TEC

Can any of the company-specific risk be diversified away by investing in both Home Plate and ADS TEC 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 Home Plate and ADS TEC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Home Plate Acquisition and ADS TEC ENERGY PLC, you can compare the effects of market volatilities on Home Plate and ADS TEC 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 Home Plate with a short position of ADS TEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Plate and ADS TEC.

Diversification Opportunities for Home Plate and ADS TEC

0.0

Correlation Coefficient

Home Plate  ADS TEC

Pay attention - limited upside

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

Pair Corralation between Home Plate and ADS TEC

If you would invest (100.00) in Home Plate Acquisition on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Home Plate Acquisition or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Home Plate Acquisition  vs.  ADS TEC ENERGY PLC

Home Plate Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Home Plate Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Home Plate is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ADS TEC ENERGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days ADS TEC ENERGY PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Home Plate and ADS TEC

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

The idea behind Home Plate Acquisition and ADS TEC ENERGY PLC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.