Correlation Between IX Acquisition and DHCA Old

Can any of the company-specific risk be diversified away by investing in both IX Acquisition and DHCA Old 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 DHCA Old 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 DHCA Old, you can compare the effects of market volatilities on IX Acquisition and DHCA Old 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 DHCA Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of IX Acquisition and DHCA Old.

Diversification Opportunities for IX Acquisition and DHCA Old

-0.14

Correlation Coefficient

IX Acquisition  DHCA Old

Good diversification

The 3 months correlation between IXAQ and DHCA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding IX Acquisition Corp and DHCA Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHCA Old 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 DHCA Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHCA Old has no effect on the direction of IX Acquisition i.e., IX Acquisition and DHCA Old go up and down completely randomly.

Pair Corralation between IX Acquisition and DHCA Old

Given the investment horizon of 90 days IX Acquisition Corp is expected to generate 0.56 times more return on investment than DHCA Old. However, IX Acquisition Corp is 1.8 times less risky than DHCA Old. It trades about 0.09 of its potential returns per unit of risk. DHCA Old is currently generating about 0.03 per unit of risk. If you would invest  1,019  in IX Acquisition Corp on October 11, 2024 and sell it today you would earn a total of  136.00  from holding IX Acquisition Corp or generate 13.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.81%
Values	Daily Returns

IX Acquisition Corp  vs.  DHCA Old

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.

DHCA Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DHCA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, DHCA Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IX Acquisition and DHCA Old

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

The idea behind IX Acquisition Corp and DHCA Old 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 Transaction History module to view history of all your transactions and understand their impact on performance.