Correlation Between ROC Energy and Arsenal Digital

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

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

Diversification Opportunities for ROC Energy and Arsenal Digital

0.0

Correlation Coefficient

ROC Energy  Arsenal Digital

Pay attention - limited upside

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

Pair Corralation between ROC Energy and Arsenal Digital

If you would invest  6.57  in Arsenal Digital Holdings on December 26, 2024 and sell it today you would lose (1.56) from holding Arsenal Digital Holdings or give up 23.74% of portfolio value over 90 days.

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

ROC Energy Acquisition  vs.  Arsenal Digital Holdings

ROC Energy Acquisition

Risk-Adjusted Performance

Very Weak

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

Arsenal Digital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arsenal Digital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Arsenal Digital is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ROC Energy and Arsenal Digital

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

The idea behind ROC Energy Acquisition and Arsenal Digital Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.