Correlation Between Oxbridge Acquisition and Data Knights

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

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

Diversification Opportunities for Oxbridge Acquisition and Data Knights

-0.53

Correlation Coefficient

Oxbridge Acquisition  Data Knights

Excellent diversification

The 3 months correlation between Oxbridge and Data is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Oxbridge Acquisition Corp and Data Knights Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Knights Acquisition and Oxbridge 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 Oxbridge Acquisition Corp are associated (or correlated) with Data Knights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Knights Acquisition has no effect on the direction of Oxbridge Acquisition i.e., Oxbridge Acquisition and Data Knights go up and down completely randomly.

Pair Corralation between Oxbridge Acquisition and Data Knights

Given the investment horizon of 90 days Oxbridge Acquisition is expected to generate 32.28 times less return on investment than Data Knights. But when comparing it to its historical volatility, Oxbridge Acquisition Corp is 70.56 times less risky than Data Knights. It trades about 0.11 of its potential returns per unit of risk. Data Knights Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3.80  in Data Knights Acquisition on October 12, 2024 and sell it today you would lose (1.90) from holding Data Knights Acquisition or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	49.21%
Values	Daily Returns

Oxbridge Acquisition Corp  vs.  Data Knights Acquisition

Oxbridge Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Data Knights Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Data Knights Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Data Knights 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 Oxbridge Acquisition and Data Knights

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

The idea behind Oxbridge Acquisition Corp and Data Knights 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.