Correlation Between PowerUp Acquisition and RF Acquisition

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

Diversification Opportunities for PowerUp Acquisition and RF Acquisition

-0.64

Correlation Coefficient

PowerUp Acquisition  RF Acquisition

Excellent diversification

The 3 months correlation between PowerUp and RFAC is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and RF Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Acquisition Corp 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 RF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Acquisition Corp has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and RF Acquisition go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and RF Acquisition

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 4.52 times more return on investment than RF Acquisition. However, PowerUp Acquisition is 4.52 times more volatile than RF Acquisition Corp. It trades about 0.18 of its potential returns per unit of risk. RF Acquisition Corp is currently generating about -0.21 per unit of risk. If you would invest  2.36  in PowerUp Acquisition Corp on October 27, 2024 and sell it today you would earn a total of  2.84  from holding PowerUp Acquisition Corp or generate 120.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	76.67%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  RF Acquisition Corp

PowerUp Acquisition Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PowerUp Acquisition Corp are ranked lower than 14 (%) 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.

RF Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RF Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with PowerUp Acquisition and RF Acquisition

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

The idea behind PowerUp Acquisition Corp and RF Acquisition Corp 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.