Correlation Between Latamgrowth SPAC and IXE Select

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

Diversification Opportunities for Latamgrowth SPAC and IXE Select

0.0

Correlation Coefficient

Latamgrowth SPAC  IXE Select

Pay attention - limited upside

The 3 months correlation between Latamgrowth and IXE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Latamgrowth SPAC Unit and IXE Select Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXE Select Sector 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 IXE Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXE Select Sector has no effect on the direction of Latamgrowth SPAC i.e., Latamgrowth SPAC and IXE Select go up and down completely randomly.

Pair Corralation between Latamgrowth SPAC and IXE Select

If you would invest  88,534  in IXE Select Sector on December 23, 2024 and sell it today you would earn a total of  8,250  from holding IXE Select Sector or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Latamgrowth SPAC Unit  vs.  IXE Select Sector

Pair Trading with Latamgrowth SPAC and IXE Select

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

The idea behind Latamgrowth SPAC Unit and IXE Select Sector 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.