Correlation Between PowerUp Acquisition and Everest Consolidator

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

Diversification Opportunities for PowerUp Acquisition and Everest Consolidator

-0.03

Correlation Coefficient

PowerUp Acquisition  Everest Consolidator

Good diversification

The 3 months correlation between PowerUp and Everest is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and Everest Consolidator Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Consolidator 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 Everest Consolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Consolidator has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and Everest Consolidator go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and Everest Consolidator

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 384.69 times more return on investment than Everest Consolidator. However, PowerUp Acquisition is 384.69 times more volatile than Everest Consolidator Acquisition. It trades about 0.11 of its potential returns per unit of risk. Everest Consolidator Acquisition is currently generating about 0.12 per unit of risk. If you would invest  6.50  in PowerUp Acquisition Corp on October 10, 2024 and sell it today you would lose (2.50) from holding PowerUp Acquisition Corp or give up 38.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.31%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  Everest Consolidator Acquisiti

PowerUp Acquisition Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, PowerUp Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Everest Consolidator

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Everest Consolidator Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Everest Consolidator may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PowerUp Acquisition and Everest Consolidator

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

The idea behind PowerUp Acquisition Corp and Everest Consolidator 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.