Correlation Between Saia and Latamgrowth SPAC

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

By analyzing existing cross correlation between Saia Inc and Latamgrowth SPAC Unit, you can compare the effects of market volatilities on Saia and Latamgrowth SPAC 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 Saia with a short position of Latamgrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saia and Latamgrowth SPAC.

Diversification Opportunities for Saia and Latamgrowth SPAC

-0.28

Correlation Coefficient

Saia  Latamgrowth SPAC

Very good diversification

The 3 months correlation between Saia and Latamgrowth is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Latamgrowth SPAC Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Latamgrowth SPAC Unit and Saia 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 Saia Inc are associated (or correlated) with Latamgrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Latamgrowth SPAC Unit has no effect on the direction of Saia i.e., Saia and Latamgrowth SPAC go up and down completely randomly.

Pair Corralation between Saia and Latamgrowth SPAC

Given the investment horizon of 90 days Saia Inc is expected to under-perform the Latamgrowth SPAC. But the stock apears to be less risky and, when comparing its historical volatility, Saia Inc is 2.92 times less risky than Latamgrowth SPAC. The stock trades about -0.32 of its potential returns per unit of risk. The Latamgrowth SPAC Unit is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,177  in Latamgrowth SPAC Unit on October 11, 2024 and sell it today you would earn a total of  224.00  from holding Latamgrowth SPAC Unit or generate 19.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Saia Inc  vs.  Latamgrowth SPAC Unit

Saia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Saia is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Latamgrowth SPAC Unit

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Latamgrowth SPAC Unit are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Latamgrowth SPAC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saia and Latamgrowth SPAC

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

The idea behind Saia Inc and Latamgrowth SPAC Unit 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .