Correlation Between RH and Accelerate Acquisition

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

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

Diversification Opportunities for RH and Accelerate Acquisition

0.0

Correlation Coefficient

RH  Accelerate Acquisition

Pay attention - limited upside

The 3 months correlation between RH and Accelerate is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RH and Accelerate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Acquisition and RH 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 RH are associated (or correlated) with Accelerate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Acquisition has no effect on the direction of RH i.e., RH and Accelerate Acquisition go up and down completely randomly.

Pair Corralation between RH and Accelerate Acquisition

If you would invest  30,401  in RH on October 10, 2024 and sell it today you would earn a total of  9,981  from holding RH or generate 32.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

RH  vs.  Accelerate Acquisition Corp

RH

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RH are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, RH demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Accelerate Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accelerate Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Accelerate Acquisition is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with RH and Accelerate Acquisition

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

The idea behind RH and Accelerate 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.