Correlation Between SPACE and Consilium Acquisition

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

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

Diversification Opportunities for SPACE and Consilium Acquisition

-0.15

Correlation Coefficient

SPACE  Consilium Acquisition

Good diversification

The 3 months correlation between SPACE and Consilium is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Consilium Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consilium Acquisition and SPACE 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 SPACE are associated (or correlated) with Consilium Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consilium Acquisition has no effect on the direction of SPACE i.e., SPACE and Consilium Acquisition go up and down completely randomly.

Pair Corralation between SPACE and Consilium Acquisition

Assuming the 90 days horizon SPACE is expected to generate 5.19 times more return on investment than Consilium Acquisition. However, SPACE is 5.19 times more volatile than Consilium Acquisition I. It trades about 0.04 of its potential returns per unit of risk. Consilium Acquisition I is currently generating about 0.14 per unit of risk. If you would invest  38.00  in SPACE on October 24, 2024 and sell it today you would earn a total of  2.00  from holding SPACE or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

SPACE  vs.  Consilium Acquisition I

SPACE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Consilium Acquisition

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Consilium Acquisition I are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating primary indicators, Consilium Acquisition may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SPACE and Consilium Acquisition

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

The idea behind SPACE and Consilium Acquisition I 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.