Correlation Between LIV Capital and LatAmGrowth SPAC

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

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

Diversification Opportunities for LIV Capital and LatAmGrowth SPAC

0.0

Correlation Coefficient

LIV Capital  LatAmGrowth SPAC

Pay attention - limited upside

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

Pair Corralation between LIV Capital and LatAmGrowth SPAC

If you would invest (100.00) in LIV Capital Acquisition on December 29, 2024 and sell it today you would earn a total of  100.00  from holding LIV Capital Acquisition or generate -100.0% return on investment over 90 days.

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

LIV Capital Acquisition  vs.  LatAmGrowth SPAC

LIV Capital Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIV Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LIV Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

LatAmGrowth SPAC

Risk-Adjusted Performance

Very Weak

Over the last 90 days LatAmGrowth SPAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with LIV Capital and LatAmGrowth SPAC

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

The idea behind LIV Capital Acquisition and LatAmGrowth SPAC 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.