Correlation Between IX Acquisition and Pinterest

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

Diversification Opportunities for IX Acquisition and Pinterest

0.04

Correlation Coefficient

IX Acquisition  Pinterest

Significant diversification

The 3 months correlation between IXAQU and Pinterest is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding IX Acquisition Corp and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of IX Acquisition i.e., IX Acquisition and Pinterest go up and down completely randomly.

Pair Corralation between IX Acquisition and Pinterest

Assuming the 90 days horizon IX Acquisition Corp is expected to generate 0.1 times more return on investment than Pinterest. However, IX Acquisition Corp is 10.18 times less risky than Pinterest. It trades about -0.04 of its potential returns per unit of risk. Pinterest is currently generating about -0.01 per unit of risk. If you would invest  1,145  in IX Acquisition Corp on September 3, 2024 and sell it today you would lose (4.00) from holding IX Acquisition Corp or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	53.13%
Values	Daily Returns

IX Acquisition Corp  vs.  Pinterest

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. In spite of comparatively stable basic indicators, IX Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IX Acquisition and Pinterest

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

The idea behind IX Acquisition Corp and Pinterest 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.