Correlation Between Voyager Acquisition and M3 Brigade

Can any of the company-specific risk be diversified away by investing in both Voyager Acquisition and M3 Brigade 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 Voyager Acquisition and M3 Brigade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voyager Acquisition Corp and M3 Brigade Acquisition V, you can compare the effects of market volatilities on Voyager Acquisition and M3 Brigade 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 Voyager Acquisition with a short position of M3 Brigade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voyager Acquisition and M3 Brigade.

Diversification Opportunities for Voyager Acquisition and M3 Brigade

0.3

Correlation Coefficient

Voyager Acquisition  M3 Brigade

Weak diversification

The 3 months correlation between Voyager and MBAV is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Voyager Acquisition Corp and M3 Brigade Acquisition V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M3 Brigade Acquisition and Voyager 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 Voyager Acquisition Corp are associated (or correlated) with M3 Brigade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M3 Brigade Acquisition has no effect on the direction of Voyager Acquisition i.e., Voyager Acquisition and M3 Brigade go up and down completely randomly.

Pair Corralation between Voyager Acquisition and M3 Brigade

Given the investment horizon of 90 days Voyager Acquisition is expected to generate 1.21 times less return on investment than M3 Brigade. In addition to that, Voyager Acquisition is 1.66 times more volatile than M3 Brigade Acquisition V. It trades about 0.07 of its total potential returns per unit of risk. M3 Brigade Acquisition V is currently generating about 0.15 per unit of volatility. If you would invest  999.00  in M3 Brigade Acquisition V on September 22, 2024 and sell it today you would earn a total of  8.00  from holding M3 Brigade Acquisition V or generate 0.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

Voyager Acquisition Corp  vs.  M3 Brigade Acquisition V

Voyager Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

M3 Brigade Acquisition

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in M3 Brigade Acquisition V are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, M3 Brigade is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Voyager Acquisition and M3 Brigade

The main advantage of trading using opposite Voyager Acquisition and M3 Brigade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voyager Acquisition position performs unexpectedly, M3 Brigade 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 M3 Brigade will offset losses from the drop in M3 Brigade's long position.

The idea behind Voyager Acquisition Corp and M3 Brigade Acquisition V 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.