Correlation Between Phoenix Biotech and Plum Acquisition

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

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

Diversification Opportunities for Phoenix Biotech and Plum Acquisition

-0.01

Correlation Coefficient

Phoenix Biotech  Plum Acquisition

Good diversification

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

Pair Corralation between Phoenix Biotech and Plum Acquisition

If you would invest  18.00  in Plum Acquisition Corp on September 16, 2024 and sell it today you would earn a total of  7.00  from holding Plum Acquisition Corp or generate 38.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	33.33%
Values	Daily Returns

Phoenix Biotech Acquisition  vs.  Plum Acquisition Corp

Phoenix Biotech Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

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

Plum Acquisition Corp

Risk-Adjusted Performance

0 of 100

Excellent

Over the last 90 days Plum Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal forward indicators, Plum Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phoenix Biotech and Plum Acquisition

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

The idea behind Phoenix Biotech Acquisition and Plum 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 CEOs Directory module to screen CEOs from public companies around the world.