Correlation Between Industrial Tech and Dune Acquisition

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

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

Diversification Opportunities for Industrial Tech and Dune Acquisition

0.0

Correlation Coefficient

Industrial Tech  Dune Acquisition

Pay attention - limited upside

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

Pair Corralation between Industrial Tech and Dune Acquisition

If you would invest (100.00) in Dune Acquisition Corp on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Dune Acquisition Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Industrial Tech Acquisitions  vs.  Dune Acquisition Corp

Industrial Tech Acqu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Industrial Tech Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Industrial Tech is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Dune Acquisition Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Industrial Tech and Dune Acquisition

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

The idea behind Industrial Tech Acquisitions and Dune 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.