Correlation Between Stantec and A SPAC

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

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

Diversification Opportunities for Stantec and A SPAC

-0.77

Correlation Coefficient

Stantec  A SPAC

Pay attention - limited upside

The 3 months correlation between Stantec and ASCA is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stantec and A SPAC I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC I and Stantec 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 Stantec are associated (or correlated) with A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC I has no effect on the direction of Stantec i.e., Stantec and A SPAC go up and down completely randomly.

Pair Corralation between Stantec and A SPAC

If you would invest  1,061  in A SPAC I on October 20, 2024 and sell it today you would earn a total of  0.00  from holding A SPAC I or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Stantec  vs.  A SPAC I

Stantec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stantec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

A SPAC I

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Stantec and A SPAC

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

The idea behind Stantec and A SPAC I 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.