Correlation Between Perception Capital and Newcourt Acquisition

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

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

Diversification Opportunities for Perception Capital and Newcourt Acquisition

0.0

Correlation Coefficient

Perception Capital  Newcourt Acquisition

Pay attention - limited upside

The 3 months correlation between Perception and Newcourt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Perception Capital Corp and Newcourt Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcourt Acquisition Corp and Perception Capital 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 Perception Capital Corp are associated (or correlated) with Newcourt Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcourt Acquisition Corp has no effect on the direction of Perception Capital i.e., Perception Capital and Newcourt Acquisition go up and down completely randomly.

Pair Corralation between Perception Capital and Newcourt Acquisition

If you would invest (100.00) in Newcourt Acquisition Corp on December 22, 2024 and sell it today you would earn a total of  100.00  from holding Newcourt Acquisition Corp or generate -100.0% return on investment over 90 days.

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

Perception Capital Corp  vs.  Newcourt Acquisition Corp

Perception Capital Corp

Risk-Adjusted Performance

Very Weak

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

Newcourt Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newcourt Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Newcourt 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 Perception Capital and Newcourt Acquisition

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

The idea behind Perception Capital Corp and Newcourt 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.