Correlation Between PowerUp Acquisition and Generation Asia

Can any of the company-specific risk be diversified away by investing in both PowerUp Acquisition and Generation Asia 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 Generation Asia 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 Generation Asia I, you can compare the effects of market volatilities on PowerUp Acquisition and Generation Asia 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 Generation Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PowerUp Acquisition and Generation Asia.

Diversification Opportunities for PowerUp Acquisition and Generation Asia

-0.42

Correlation Coefficient

PowerUp Acquisition  Generation Asia

Very good diversification

The 3 months correlation between PowerUp and Generation is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and Generation Asia I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Asia I 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 Generation Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Asia I has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and Generation Asia go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and Generation Asia

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to under-perform the Generation Asia. In addition to that, PowerUp Acquisition is 126.43 times more volatile than Generation Asia I. It trades about -0.06 of its total potential returns per unit of risk. Generation Asia I is currently generating about 0.19 per unit of volatility. If you would invest  1,121  in Generation Asia I on September 3, 2024 and sell it today you would earn a total of  19.00  from holding Generation Asia I or generate 1.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	62.75%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  Generation Asia I

PowerUp Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PowerUp Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Generation Asia I

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with PowerUp Acquisition and Generation Asia

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

The idea behind PowerUp Acquisition Corp and Generation Asia I 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.