Correlation Between Project Energy and LatAmGrowth SPAC

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

By analyzing existing cross correlation between Project Energy Reimagined and LatAmGrowth SPAC, you can compare the effects of market volatilities on Project Energy and LatAmGrowth SPAC 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 Project Energy with a short position of LatAmGrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Project Energy and LatAmGrowth SPAC.

Diversification Opportunities for Project Energy and LatAmGrowth SPAC

-0.23

Correlation Coefficient

Project Energy  LatAmGrowth SPAC

Very good diversification

The 3 months correlation between Project and LatAmGrowth is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Project Energy Reimagined and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC and Project Energy 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 Project Energy Reimagined are associated (or correlated) with LatAmGrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LatAmGrowth SPAC has no effect on the direction of Project Energy i.e., Project Energy and LatAmGrowth SPAC go up and down completely randomly.

Pair Corralation between Project Energy and LatAmGrowth SPAC

Given the investment horizon of 90 days Project Energy Reimagined is expected to under-perform the LatAmGrowth SPAC. In addition to that, Project Energy is 4.59 times more volatile than LatAmGrowth SPAC. It trades about -0.05 of its total potential returns per unit of risk. LatAmGrowth SPAC is currently generating about 0.0 per unit of volatility. If you would invest  1,032  in LatAmGrowth SPAC on October 4, 2024 and sell it today you would lose (50.00) from holding LatAmGrowth SPAC or give up 4.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.03%
Values	Daily Returns

Project Energy Reimagined  vs.  LatAmGrowth SPAC

Project Energy Reimagined

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Project Energy Reimagined has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Project Energy is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

LatAmGrowth SPAC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LatAmGrowth SPAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Project Energy and LatAmGrowth SPAC

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

The idea behind Project Energy Reimagined and LatAmGrowth SPAC 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.