Correlation Between Plum Acquisition and Voyager Acquisition

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

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

Diversification Opportunities for Plum Acquisition and Voyager Acquisition

0.73

Correlation Coefficient

Plum Acquisition  Voyager Acquisition

Poor diversification

The 3 months correlation between Plum and Voyager is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Plum Acquisition Corp and Voyager Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voyager Acquisition Corp and Plum 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 Plum Acquisition Corp are associated (or correlated) with Voyager Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voyager Acquisition Corp has no effect on the direction of Plum Acquisition i.e., Plum Acquisition and Voyager Acquisition go up and down completely randomly.

Pair Corralation between Plum Acquisition and Voyager Acquisition

Assuming the 90 days horizon Plum Acquisition Corp is expected to under-perform the Voyager Acquisition. In addition to that, Plum Acquisition is 57.49 times more volatile than Voyager Acquisition Corp. It trades about -0.08 of its total potential returns per unit of risk. Voyager Acquisition Corp is currently generating about 0.13 per unit of volatility. If you would invest  1,003  in Voyager Acquisition Corp on December 27, 2024 and sell it today you would earn a total of  18.00  from holding Voyager Acquisition Corp or generate 1.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	19.67%
Values	Daily Returns

Plum Acquisition Corp  vs.  Voyager Acquisition Corp

Plum Acquisition Corp

Risk-Adjusted Performance

Very Weak

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 unsteady performance in the last few months, the Stock's forward-looking indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Voyager Acquisition Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Plum Acquisition and Voyager Acquisition

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

The idea behind Plum Acquisition Corp and Voyager 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.