Correlation Between Pono Capital and FLFV Old

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

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

Diversification Opportunities for Pono Capital and FLFV Old

0.33

Correlation Coefficient

Pono Capital  FLFV Old

Weak diversification

The 3 months correlation between Pono and FLFV is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pono Capital Two and FLFV Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLFV Old and Pono 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 Pono Capital Two are associated (or correlated) with FLFV Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLFV Old has no effect on the direction of Pono Capital i.e., Pono Capital and FLFV Old go up and down completely randomly.

Pair Corralation between Pono Capital and FLFV Old

Assuming the 90 days horizon Pono Capital Two is expected to generate 0.92 times more return on investment than FLFV Old. However, Pono Capital Two is 1.08 times less risky than FLFV Old. It trades about 0.03 of its potential returns per unit of risk. FLFV Old is currently generating about -0.08 per unit of risk. If you would invest  1,027  in Pono Capital Two on October 9, 2024 and sell it today you would earn a total of  173.00  from holding Pono Capital Two or generate 16.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	86.19%
Values	Daily Returns

Pono Capital Two  vs.  FLFV Old

Pono Capital Two

Risk-Adjusted Performance

0 of 100

Very Weak

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

FLFV Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pono Capital and FLFV Old

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

The idea behind Pono Capital Two and FLFV Old 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.