Correlation Between PowerUp Acquisition and AA Mission

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

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

Diversification Opportunities for PowerUp Acquisition and AA Mission

-0.38

Correlation Coefficient

PowerUp Acquisition  AA Mission

Very good diversification

The 3 months correlation between PowerUp and AAM is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and AA Mission Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AA Mission Acquisition and PowerUp 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 PowerUp Acquisition Corp are associated (or correlated) with AA Mission. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AA Mission Acquisition has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and AA Mission go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and AA Mission

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 182.04 times more return on investment than AA Mission. However, PowerUp Acquisition is 182.04 times more volatile than AA Mission Acquisition. It trades about 0.22 of its potential returns per unit of risk. AA Mission Acquisition is currently generating about 0.15 per unit of risk. If you would invest  2.11  in PowerUp Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  0.74  from holding PowerUp Acquisition Corp or generate 35.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	71.43%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  AA Mission Acquisition

PowerUp Acquisition Corp

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, PowerUp Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

AA Mission Acquisition

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AA Mission Acquisition are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AA Mission is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PowerUp Acquisition and AA Mission

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

The idea behind PowerUp Acquisition Corp and AA Mission 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.