Correlation Between Latamgrowth SPAC and TLGY Acquisition

Can any of the company-specific risk be diversified away by investing in both Latamgrowth SPAC and TLGY 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 Latamgrowth SPAC and TLGY Acquisition 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 TLGY Acquisition Corp, you can compare the effects of market volatilities on Latamgrowth SPAC and TLGY 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 Latamgrowth SPAC with a short position of TLGY Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Latamgrowth SPAC and TLGY Acquisition.

Diversification Opportunities for Latamgrowth SPAC and TLGY Acquisition

-0.14

Correlation Coefficient

Latamgrowth SPAC  TLGY Acquisition

Good diversification

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

Pair Corralation between Latamgrowth SPAC and TLGY Acquisition

Assuming the 90 days horizon Latamgrowth SPAC Unit is expected to generate 22.48 times more return on investment than TLGY Acquisition. However, Latamgrowth SPAC is 22.48 times more volatile than TLGY Acquisition Corp. It trades about 0.02 of its potential returns per unit of risk. TLGY Acquisition Corp is currently generating about 0.27 per unit of risk. If you would invest  1,170  in Latamgrowth SPAC Unit on September 15, 2024 and sell it today you would earn a total of  9.00  from holding Latamgrowth SPAC Unit or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Latamgrowth SPAC Unit  vs.  TLGY Acquisition Corp

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 stable technical and fundamental indicators, Latamgrowth SPAC is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

TLGY Acquisition Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TLGY Acquisition Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, TLGY Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Latamgrowth SPAC and TLGY Acquisition

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

The idea behind Latamgrowth SPAC Unit and TLGY 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.