Correlation Between PowerUp Acquisition and XAI Octagon

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

Diversification Opportunities for PowerUp Acquisition and XAI Octagon

-0.39

Correlation Coefficient

PowerUp Acquisition  XAI Octagon

Very good diversification

The 3 months correlation between PowerUp and XAI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PowerUp Acquisition Corp and XAI Octagon Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAI Octagon Floating 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 XAI Octagon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAI Octagon Floating has no effect on the direction of PowerUp Acquisition i.e., PowerUp Acquisition and XAI Octagon go up and down completely randomly.

Pair Corralation between PowerUp Acquisition and XAI Octagon

Assuming the 90 days horizon PowerUp Acquisition Corp is expected to generate 18.43 times more return on investment than XAI Octagon. However, PowerUp Acquisition is 18.43 times more volatile than XAI Octagon Floating. It trades about 0.18 of its potential returns per unit of risk. XAI Octagon Floating is currently generating about -0.11 per unit of risk. If you would invest  2.74  in PowerUp Acquisition Corp on December 1, 2024 and sell it today you would earn a total of  3.81  from holding PowerUp Acquisition Corp or generate 139.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

PowerUp Acquisition Corp  vs.  XAI Octagon Floating

PowerUp Acquisition Corp

Risk-Adjusted Performance

Good

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 fairly abnormal basic indicators, PowerUp Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

XAI Octagon Floating

Risk-Adjusted Performance

Very Weak

Over the last 90 days XAI Octagon Floating has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PowerUp Acquisition and XAI Octagon

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

The idea behind PowerUp Acquisition Corp and XAI Octagon Floating 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 Stocks Directory module to find actively traded stocks across global markets.