Correlation Between Rf Acquisition and Patria Latin

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

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

Diversification Opportunities for Rf Acquisition and Patria Latin

0.57

Correlation Coefficient

Rf Acquisition  Patria Latin

Very weak diversification

The 3 months correlation between RFACU and Patria is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Rf Acquisition Corp and Patria Latin American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Latin American and Rf 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 Rf Acquisition Corp are associated (or correlated) with Patria Latin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Latin American has no effect on the direction of Rf Acquisition i.e., Rf Acquisition and Patria Latin go up and down completely randomly.

Pair Corralation between Rf Acquisition and Patria Latin

Assuming the 90 days horizon Rf Acquisition is expected to generate 3.57 times less return on investment than Patria Latin. But when comparing it to its historical volatility, Rf Acquisition Corp is 11.6 times less risky than Patria Latin. It trades about 0.1 of its potential returns per unit of risk. Patria Latin American is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,150  in Patria Latin American on September 3, 2024 and sell it today you would earn a total of  12.00  from holding Patria Latin American or generate 1.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.63%
Values	Daily Returns

Rf Acquisition Corp  vs.  Patria Latin American

Rf Acquisition Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rf Acquisition Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Rf Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Patria Latin American

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Patria Latin American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Patria Latin is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rf Acquisition and Patria Latin

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

The idea behind Rf Acquisition Corp and Patria Latin American 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.

Check out your portfolio center.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..