Correlation Between Newcourt Acquisition and Senior Connect

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

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

Diversification Opportunities for Newcourt Acquisition and Senior Connect

0.14

Correlation Coefficient

Newcourt Acquisition  Senior Connect

Average diversification

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

Pair Corralation between Newcourt Acquisition and Senior Connect

Given the investment horizon of 90 days Newcourt Acquisition Corp is expected to generate 0.51 times more return on investment than Senior Connect. However, Newcourt Acquisition Corp is 1.95 times less risky than Senior Connect. It trades about 0.19 of its potential returns per unit of risk. Senior Connect Acquisition is currently generating about 0.04 per unit of risk. If you would invest  1,036  in Newcourt Acquisition Corp on October 4, 2024 and sell it today you would earn a total of  64.00  from holding Newcourt Acquisition Corp or generate 6.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	82.44%
Values	Daily Returns

Newcourt Acquisition Corp  vs.  Senior Connect Acquisition

Newcourt Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newcourt Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Newcourt Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Senior Connect Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senior Connect Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Senior Connect is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Newcourt Acquisition and Senior Connect

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

The idea behind Newcourt Acquisition Corp and Senior Connect Acquisition 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 Commodity Directory module to find actively traded commodities issued by global exchanges.