Correlation Between OCA Acquisition and AXIOS Sustainable

Can any of the company-specific risk be diversified away by investing in both OCA Acquisition and AXIOS Sustainable 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 AXIOS Sustainable 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 AXIOS Sustainable Growth, you can compare the effects of market volatilities on OCA Acquisition and AXIOS Sustainable 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 AXIOS Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCA Acquisition and AXIOS Sustainable.

Diversification Opportunities for OCA Acquisition and AXIOS Sustainable

0.64

Correlation Coefficient

OCA Acquisition  AXIOS Sustainable

Poor diversification

The 3 months correlation between OCA and AXIOS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding OCA Acquisition Corp and AXIOS Sustainable Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIOS Sustainable Growth 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 AXIOS Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIOS Sustainable Growth has no effect on the direction of OCA Acquisition i.e., OCA Acquisition and AXIOS Sustainable go up and down completely randomly.

Pair Corralation between OCA Acquisition and AXIOS Sustainable

If you would invest  1,043  in AXIOS Sustainable Growth on September 28, 2024 and sell it today you would earn a total of  0.00  from holding AXIOS Sustainable Growth or generate 0.0% return on investment over 90 days.

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

OCA Acquisition Corp  vs.  AXIOS Sustainable Growth

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 stable basic indicators, OCA Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

AXIOS Sustainable Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXIOS Sustainable Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AXIOS Sustainable is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with OCA Acquisition and AXIOS Sustainable

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

The idea behind OCA Acquisition Corp and AXIOS Sustainable Growth 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.