Correlation Between Rose Hill and Marblegate Acquisition

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

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

Diversification Opportunities for Rose Hill and Marblegate Acquisition

-0.26

Correlation Coefficient

Rose Hill  Marblegate Acquisition

Very good diversification

The 3 months correlation between Rose and Marblegate is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Rose Hill Acquisition and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate Acquisition and Rose Hill 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 Rose Hill Acquisition are associated (or correlated) with Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Rose Hill i.e., Rose Hill and Marblegate Acquisition go up and down completely randomly.

Pair Corralation between Rose Hill and Marblegate Acquisition

Assuming the 90 days horizon Rose Hill Acquisition is expected to generate 1.54 times more return on investment than Marblegate Acquisition. However, Rose Hill is 1.54 times more volatile than Marblegate Acquisition Corp. It trades about 0.09 of its potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about 0.08 per unit of risk. If you would invest  8.01  in Rose Hill Acquisition on September 16, 2024 and sell it today you would lose (4.63) from holding Rose Hill Acquisition or give up 57.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	26.01%
Values	Daily Returns

Rose Hill Acquisition  vs.  Marblegate Acquisition Corp

Rose Hill Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rose Hill Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Rose Hill is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Marblegate Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marblegate Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Marblegate Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Rose Hill and Marblegate Acquisition

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

The idea behind Rose Hill Acquisition and Marblegate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.