Correlation Between Noble Rock and Anthemis Digital

Can any of the company-specific risk be diversified away by investing in both Noble Rock and Anthemis Digital 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 Noble Rock and Anthemis Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Noble Rock Acquisition and Anthemis Digital Acquisitions, you can compare the effects of market volatilities on Noble Rock and Anthemis Digital 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 Noble Rock with a short position of Anthemis Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Rock and Anthemis Digital.

Diversification Opportunities for Noble Rock and Anthemis Digital

0.0

Correlation Coefficient

Noble Rock  Anthemis Digital

Pay attention - limited upside

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

Pair Corralation between Noble Rock and Anthemis Digital

Assuming the 90 days horizon Noble Rock is expected to generate 1.13 times less return on investment than Anthemis Digital. But when comparing it to its historical volatility, Noble Rock Acquisition is 1.72 times less risky than Anthemis Digital. It trades about 0.12 of its potential returns per unit of risk. Anthemis Digital Acquisitions is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8.80  in Anthemis Digital Acquisitions on October 25, 2024 and sell it today you would lose (8.61) from holding Anthemis Digital Acquisitions or give up 97.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	84.93%
Values	Daily Returns

Noble Rock Acquisition  vs.  Anthemis Digital Acquisitions

Noble Rock Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble Rock Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Noble Rock is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Anthemis Digital Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anthemis Digital Acquisitions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Anthemis Digital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Noble Rock and Anthemis Digital

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

The idea behind Noble Rock Acquisition and Anthemis Digital Acquisitions 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.