Correlation Between Powell Max and Inflection Point

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

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

Diversification Opportunities for Powell Max and Inflection Point

-0.48

Correlation Coefficient

Powell Max  Inflection Point

Very good diversification

The 3 months correlation between Powell and Inflection is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Powell Max Limited and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq and Powell Max 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 Powell Max Limited are associated (or correlated) with Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Powell Max i.e., Powell Max and Inflection Point go up and down completely randomly.

Pair Corralation between Powell Max and Inflection Point

Given the investment horizon of 90 days Powell Max Limited is expected to under-perform the Inflection Point. But the stock apears to be less risky and, when comparing its historical volatility, Powell Max Limited is 7.84 times less risky than Inflection Point. The stock trades about -0.09 of its potential returns per unit of risk. The Inflection Point Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Inflection Point Acquisition on October 1, 2024 and sell it today you would earn a total of  1,255  from holding Inflection Point Acquisition or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.1%
Values	Daily Returns

Powell Max Limited  vs.  Inflection Point Acquisition

Powell Max Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powell Max Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Inflection Point Acq

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Powell Max and Inflection Point

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

The idea behind Powell Max Limited and Inflection Point 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.