Correlation Between Swiftmerge Acquisition and Sitka Gold

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

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

Diversification Opportunities for Swiftmerge Acquisition and Sitka Gold

0.06

Correlation Coefficient

Swiftmerge Acquisition  Sitka Gold

Significant diversification

The 3 months correlation between Swiftmerge and Sitka is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Swiftmerge Acquisition Corp and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp and Swiftmerge Acquisition 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 Swiftmerge Acquisition Corp are associated (or correlated) with Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of Swiftmerge Acquisition i.e., Swiftmerge Acquisition and Sitka Gold go up and down completely randomly.

Pair Corralation between Swiftmerge Acquisition and Sitka Gold

Given the investment horizon of 90 days Swiftmerge Acquisition is expected to generate 30.53 times less return on investment than Sitka Gold. But when comparing it to its historical volatility, Swiftmerge Acquisition Corp is 5.89 times less risky than Sitka Gold. It trades about 0.01 of its potential returns per unit of risk. Sitka Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  9.00  in Sitka Gold Corp on September 26, 2024 and sell it today you would earn a total of  15.00  from holding Sitka Gold Corp or generate 166.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.59%
Values	Daily Returns

Swiftmerge Acquisition Corp  vs.  Sitka Gold Corp

Swiftmerge Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sitka Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sitka Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Sitka Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Swiftmerge Acquisition and Sitka Gold

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

The idea behind Swiftmerge Acquisition Corp and Sitka Gold 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.