Correlation Between RMG Acquisition and Mr Price

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

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

Diversification Opportunities for RMG Acquisition and Mr Price

0.0

Correlation Coefficient

RMG Acquisition  Mr Price

Pay attention - limited upside

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

Pair Corralation between RMG Acquisition and Mr Price

If you would invest (100.00) in RMG Acquisition Corp on December 19, 2024 and sell it today you would earn a total of  100.00  from holding RMG Acquisition Corp or generate -100.0% return on investment over 90 days.

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

RMG Acquisition Corp  vs.  Mr Price Group

RMG Acquisition Corp

Risk-Adjusted Performance

Very Weak

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

Mr Price Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mr Price Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with RMG Acquisition and Mr Price

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

The idea behind RMG Acquisition Corp and Mr Price Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.