Correlation Between Keyarch Acquisition and OCA Acquisition

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

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

Diversification Opportunities for Keyarch Acquisition and OCA Acquisition

-0.3

Correlation Coefficient

Keyarch Acquisition  OCA Acquisition

Very good diversification

The 3 months correlation between Keyarch and OCA is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Keyarch Acquisition and OCA Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCA Acquisition Corp and Keyarch 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 Keyarch Acquisition are associated (or correlated) with OCA Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCA Acquisition Corp has no effect on the direction of Keyarch Acquisition i.e., Keyarch Acquisition and OCA Acquisition go up and down completely randomly.

Pair Corralation between Keyarch Acquisition and OCA Acquisition

Assuming the 90 days horizon Keyarch Acquisition is expected to generate 3.09 times more return on investment than OCA Acquisition. However, Keyarch Acquisition is 3.09 times more volatile than OCA Acquisition Corp. It trades about 0.08 of its potential returns per unit of risk. OCA Acquisition Corp is currently generating about 0.05 per unit of risk. If you would invest  1,016  in Keyarch Acquisition on September 21, 2024 and sell it today you would earn a total of  138.00  from holding Keyarch Acquisition or generate 13.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.78%
Values	Daily Returns

Keyarch Acquisition  vs.  OCA Acquisition Corp

Keyarch Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

OCA Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Keyarch Acquisition and OCA Acquisition

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

The idea behind Keyarch Acquisition and OCA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.