Correlation Between OCA Acquisition and Keyarch Acquisition

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

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

Diversification Opportunities for OCA Acquisition and Keyarch Acquisition

-0.3

Correlation Coefficient

OCA Acquisition  Keyarch Acquisition

Very good diversification

The 3 months correlation between OCA and Keyarch is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding OCA Acquisition Corp and Keyarch Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyarch Acquisition and OCA 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 OCA Acquisition Corp are associated (or correlated) with Keyarch Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyarch Acquisition has no effect on the direction of OCA Acquisition i.e., OCA Acquisition and Keyarch Acquisition go up and down completely randomly.

Pair Corralation between OCA Acquisition and Keyarch Acquisition

Given the investment horizon of 90 days OCA Acquisition is expected to generate 4.83 times less return on investment than Keyarch Acquisition. But when comparing it to its historical volatility, OCA Acquisition Corp is 3.09 times less risky than Keyarch Acquisition. It trades about 0.05 of its potential returns per unit of risk. Keyarch Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,016  in Keyarch Acquisition on September 21, 2024 and sell it today you would earn a total of  138.00  from holding Keyarch Acquisition or generate 13.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.78%
Values	Daily Returns

OCA Acquisition Corp  vs.  Keyarch Acquisition

OCA Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Keyarch Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keyarch Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Keyarch Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with OCA Acquisition and Keyarch Acquisition

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

The idea behind OCA Acquisition Corp and Keyarch 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.