Correlation Between Latamgrowth SPAC and EMLDU Old

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

By analyzing existing cross correlation between Latamgrowth SPAC Unit and EMLDU Old, you can compare the effects of market volatilities on Latamgrowth SPAC and EMLDU 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 Latamgrowth SPAC with a short position of EMLDU Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latamgrowth SPAC and EMLDU Old.

Diversification Opportunities for Latamgrowth SPAC and EMLDU Old

-0.03

Correlation Coefficient

Latamgrowth SPAC  EMLDU Old

Good diversification

The 3 months correlation between Latamgrowth and EMLDU is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Latamgrowth SPAC Unit and EMLDU Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMLDU Old and Latamgrowth SPAC 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 Latamgrowth SPAC Unit are associated (or correlated) with EMLDU Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMLDU Old has no effect on the direction of Latamgrowth SPAC i.e., Latamgrowth SPAC and EMLDU Old go up and down completely randomly.

Pair Corralation between Latamgrowth SPAC and EMLDU Old

Assuming the 90 days horizon Latamgrowth SPAC is expected to generate 1.1 times less return on investment than EMLDU Old. In addition to that, Latamgrowth SPAC is 1.87 times more volatile than EMLDU Old. It trades about 0.02 of its total potential returns per unit of risk. EMLDU Old is currently generating about 0.04 per unit of volatility. If you would invest  1,037  in EMLDU Old on October 24, 2024 and sell it today you would earn a total of  163.00  from holding EMLDU Old or generate 15.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.21%
Values	Daily Returns

Latamgrowth SPAC Unit  vs.  EMLDU Old

Latamgrowth SPAC Unit

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Latamgrowth SPAC Unit are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Latamgrowth SPAC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

EMLDU Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Latamgrowth SPAC and EMLDU Old

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

The idea behind Latamgrowth SPAC Unit and EMLDU 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 CEOs Directory module to screen CEOs from public companies around the world.