Correlation Between Inflection Point and Lever Global

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

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

Diversification Opportunities for Inflection Point and Lever Global

0.48

Correlation Coefficient

Inflection Point  Lever Global

Very weak diversification

The 3 months correlation between Inflection and Lever is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Lever Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lever Global and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Lever Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lever Global has no effect on the direction of Inflection Point i.e., Inflection Point and Lever Global go up and down completely randomly.

Pair Corralation between Inflection Point and Lever Global

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 1.0 times more return on investment than Lever Global. However, Inflection Point is 1.0 times more volatile than Lever Global. It trades about 0.19 of its potential returns per unit of risk. Lever Global is currently generating about 0.15 per unit of risk. If you would invest  1,086  in Inflection Point Acquisition on September 21, 2024 and sell it today you would earn a total of  249.00  from holding Inflection Point Acquisition or generate 22.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Inflection Point Acquisition  vs.  Lever Global

Inflection Point Acq

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Lever Global

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lever Global are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Lever Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inflection Point and Lever Global

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

The idea behind Inflection Point Acquisition and Lever Global 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.