Correlation Between Senior Connect and LatAmGrowth SPAC

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

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

Diversification Opportunities for Senior Connect and LatAmGrowth SPAC

0.06

Correlation Coefficient

Senior Connect  LatAmGrowth SPAC

Significant diversification

The 3 months correlation between Senior and LatAmGrowth is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Senior Connect Acquisition and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC and Senior Connect 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 Senior Connect Acquisition 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 has no effect on the direction of Senior Connect i.e., Senior Connect and LatAmGrowth SPAC go up and down completely randomly.

Pair Corralation between Senior Connect and LatAmGrowth SPAC

Given the investment horizon of 90 days Senior Connect Acquisition is expected to generate 0.33 times more return on investment than LatAmGrowth SPAC. However, Senior Connect Acquisition is 3.02 times less risky than LatAmGrowth SPAC. It trades about 0.04 of its potential returns per unit of risk. LatAmGrowth SPAC is currently generating about 0.0 per unit of risk. If you would invest  985.00  in Senior Connect Acquisition on October 4, 2024 and sell it today you would earn a total of  19.00  from holding Senior Connect Acquisition or generate 1.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	21.77%
Values	Daily Returns

Senior Connect Acquisition  vs.  LatAmGrowth SPAC

Senior Connect Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

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

LatAmGrowth SPAC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LatAmGrowth SPAC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Senior Connect and LatAmGrowth SPAC

The main advantage of trading using opposite Senior Connect and LatAmGrowth SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senior Connect 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 Senior Connect Acquisition and LatAmGrowth SPAC 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.