Correlation Between IX Acquisition and Atlantic Energy

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

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

Diversification Opportunities for IX Acquisition and Atlantic Energy

0.5

Correlation Coefficient

IX Acquisition  Atlantic Energy

Very weak diversification

The 3 months correlation between IXAQ and Atlantic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding IX Acquisition Corp and Atlantic Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Energy Solutions and IX 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 IX Acquisition Corp are associated (or correlated) with Atlantic Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Energy Solutions has no effect on the direction of IX Acquisition i.e., IX Acquisition and Atlantic Energy go up and down completely randomly.

Pair Corralation between IX Acquisition and Atlantic Energy

Given the investment horizon of 90 days IX Acquisition is expected to generate 72.21 times less return on investment than Atlantic Energy. But when comparing it to its historical volatility, IX Acquisition Corp is 63.35 times less risky than Atlantic Energy. It trades about 0.08 of its potential returns per unit of risk. Atlantic Energy Solutions is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1.10  in Atlantic Energy Solutions on October 24, 2024 and sell it today you would lose (0.34) from holding Atlantic Energy Solutions or give up 30.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.98%
Values	Daily Returns

IX Acquisition Corp  vs.  Atlantic Energy Solutions

IX Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atlantic Energy Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic Energy Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Atlantic Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IX Acquisition and Atlantic Energy

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

The idea behind IX Acquisition Corp and Atlantic Energy Solutions 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.