Correlation Between Sculptor Acquisition and Viscogliosi Brothers

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

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

Diversification Opportunities for Sculptor Acquisition and Viscogliosi Brothers

0.51

Correlation Coefficient

Sculptor Acquisition  Viscogliosi Brothers

Very weak diversification

The 3 months correlation between Sculptor and Viscogliosi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sculptor Acquisition Corp and Viscogliosi Brothers Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viscogliosi Brothers and Sculptor 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 Sculptor Acquisition Corp are associated (or correlated) with Viscogliosi Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viscogliosi Brothers has no effect on the direction of Sculptor Acquisition i.e., Sculptor Acquisition and Viscogliosi Brothers go up and down completely randomly.

Pair Corralation between Sculptor Acquisition and Viscogliosi Brothers

Given the investment horizon of 90 days Sculptor Acquisition Corp is expected to generate 0.22 times more return on investment than Viscogliosi Brothers. However, Sculptor Acquisition Corp is 4.52 times less risky than Viscogliosi Brothers. It trades about 0.23 of its potential returns per unit of risk. Viscogliosi Brothers Acquisition is currently generating about 0.05 per unit of risk. If you would invest  1,026  in Sculptor Acquisition Corp on September 19, 2024 and sell it today you would earn a total of  29.00  from holding Sculptor Acquisition Corp or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	73.76%
Values	Daily Returns

Sculptor Acquisition Corp  vs.  Viscogliosi Brothers Acquisiti

Sculptor Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Viscogliosi Brothers

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sculptor Acquisition and Viscogliosi Brothers

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

The idea behind Sculptor Acquisition Corp and Viscogliosi Brothers Acquisition 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.