Correlation Between Inflection Point and Oaktree Acquisition

Can any of the company-specific risk be diversified away by investing in both Inflection Point and Oaktree 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 Inflection Point and Oaktree Acquisition 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 Oaktree Acquisition Corp, you can compare the effects of market volatilities on Inflection Point and Oaktree 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 Inflection Point with a short position of Oaktree Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Oaktree Acquisition.

Diversification Opportunities for Inflection Point and Oaktree Acquisition

0.32

Correlation Coefficient

Inflection Point  Oaktree Acquisition

Weak diversification

The 3 months correlation between Inflection and Oaktree is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Oaktree Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Acquisition Corp 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 Oaktree Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Acquisition Corp has no effect on the direction of Inflection Point i.e., Inflection Point and Oaktree Acquisition go up and down completely randomly.

Pair Corralation between Inflection Point and Oaktree Acquisition

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 20.81 times more return on investment than Oaktree Acquisition. However, Inflection Point is 20.81 times more volatile than Oaktree Acquisition Corp. It trades about 0.14 of its potential returns per unit of risk. Oaktree Acquisition Corp is currently generating about -0.05 per unit of risk. If you would invest  1,086  in Inflection Point Acquisition on September 26, 2024 and sell it today you would earn a total of  169.00  from holding Inflection Point Acquisition or generate 15.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Inflection Point Acquisition  vs.  Oaktree Acquisition Corp

Inflection Point Acq

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Oaktree Acquisition Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Oaktree Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Inflection Point and Oaktree Acquisition

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

The idea behind Inflection Point Acquisition and Oaktree Acquisition Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.