Correlation Between New Era and PowerUp Acquisition

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

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

Diversification Opportunities for New Era and PowerUp Acquisition

-0.07

Correlation Coefficient

New Era  PowerUp Acquisition

Good diversification

The 3 months correlation between New and PowerUp is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding New Era Helium and PowerUp Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerUp Acquisition Corp and New Era 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 New Era Helium are associated (or correlated) with PowerUp Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerUp Acquisition Corp has no effect on the direction of New Era i.e., New Era and PowerUp Acquisition go up and down completely randomly.

Pair Corralation between New Era and PowerUp Acquisition

Assuming the 90 days horizon New Era Helium is expected to under-perform the PowerUp Acquisition. In addition to that, New Era is 15.77 times more volatile than PowerUp Acquisition Corp. It trades about -0.34 of its total potential returns per unit of risk. PowerUp Acquisition Corp is currently generating about 0.23 per unit of volatility. If you would invest  1,140  in PowerUp Acquisition Corp on September 21, 2024 and sell it today you would earn a total of  60.00  from holding PowerUp Acquisition Corp or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	42.86%
Values	Daily Returns

New Era Helium  vs.  PowerUp Acquisition Corp

New Era Helium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Era Helium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

PowerUp Acquisition Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, PowerUp Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with New Era and PowerUp Acquisition

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

The idea behind New Era Helium and PowerUp 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.