Correlation Between New Providence and Cohen Circle

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

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

Diversification Opportunities for New Providence and Cohen Circle

-0.12

Correlation Coefficient

New Providence  Cohen Circle

Good diversification

The 3 months correlation between New and Cohen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding New Providence Acquisition and Cohen Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Circle Acquisition and New Providence 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 Providence Acquisition are associated (or correlated) with Cohen Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Circle Acquisition has no effect on the direction of New Providence i.e., New Providence and Cohen Circle go up and down completely randomly.

Pair Corralation between New Providence and Cohen Circle

If you would invest  1,007  in Cohen Circle Acquisition on October 8, 2024 and sell it today you would earn a total of  8.00  from holding Cohen Circle Acquisition or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

New Providence Acquisition  vs.  Cohen Circle Acquisition

New Providence Acqui

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days New Providence Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain fundamental drivers, New Providence may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Cohen Circle Acquisition

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Circle Acquisition are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cohen Circle is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with New Providence and Cohen Circle

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

The idea behind New Providence Acquisition and Cohen Circle 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.