Correlation Between Moringa Acquisition and IFIN Old

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

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

Diversification Opportunities for Moringa Acquisition and IFIN Old

0.65

Correlation Coefficient

Moringa Acquisition  IFIN Old

Poor diversification

The 3 months correlation between Moringa and IFIN is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Moringa Acquisition Corp and IFIN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IFIN Old and Moringa 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 Moringa Acquisition Corp are associated (or correlated) with IFIN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IFIN Old has no effect on the direction of Moringa Acquisition i.e., Moringa Acquisition and IFIN Old go up and down completely randomly.

Pair Corralation between Moringa Acquisition and IFIN Old

Given the investment horizon of 90 days Moringa Acquisition Corp is expected to generate 0.95 times more return on investment than IFIN Old. However, Moringa Acquisition Corp is 1.06 times less risky than IFIN Old. It trades about -0.06 of its potential returns per unit of risk. IFIN Old is currently generating about -0.07 per unit of risk. If you would invest  1,053  in Moringa Acquisition Corp on October 24, 2024 and sell it today you would lose (1,053) from holding Moringa Acquisition Corp or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.97%
Values	Daily Returns

Moringa Acquisition Corp  vs.  IFIN Old

Moringa Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

IFIN Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IFIN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, IFIN Old is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Moringa Acquisition and IFIN Old

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

The idea behind Moringa Acquisition Corp and IFIN 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.