Correlation Between Northview Acquisition and Marblegate Acquisition

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

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

Diversification Opportunities for Northview Acquisition and Marblegate Acquisition

-0.01

Correlation Coefficient

Northview Acquisition  Marblegate Acquisition

Good diversification

The 3 months correlation between Northview and Marblegate is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Northview Acquisition Corp and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate Acquisition and Northview 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 Northview Acquisition Corp are associated (or correlated) with Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Northview Acquisition i.e., Northview Acquisition and Marblegate Acquisition go up and down completely randomly.

Pair Corralation between Northview Acquisition and Marblegate Acquisition

Given the investment horizon of 90 days Northview Acquisition is expected to generate 18.64 times less return on investment than Marblegate Acquisition. But when comparing it to its historical volatility, Northview Acquisition Corp is 52.97 times less risky than Marblegate Acquisition. It trades about 0.13 of its potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,091  in Marblegate Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  17.00  from holding Marblegate Acquisition Corp or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Northview Acquisition Corp  vs.  Marblegate Acquisition Corp

Northview Acquisition

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Northview Acquisition Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Northview Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Marblegate Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Marblegate Acquisition Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Marblegate Acquisition is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Northview Acquisition and Marblegate Acquisition

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

The idea behind Northview Acquisition Corp and Marblegate 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.

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