Correlation Between Vector Acquisition and Maquia Capital

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

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

Diversification Opportunities for Vector Acquisition and Maquia Capital

0.61

Correlation Coefficient

Vector Acquisition  Maquia Capital

Poor diversification

The 3 months correlation between Vector and Maquia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vector Acquisition II and Maquia Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maquia Capital Acqui and Vector 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 Vector Acquisition II are associated (or correlated) with Maquia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maquia Capital Acqui has no effect on the direction of Vector Acquisition i.e., Vector Acquisition and Maquia Capital go up and down completely randomly.

Pair Corralation between Vector Acquisition and Maquia Capital

Given the investment horizon of 90 days Vector Acquisition II is expected to generate 0.38 times more return on investment than Maquia Capital. However, Vector Acquisition II is 2.65 times less risky than Maquia Capital. It trades about 0.08 of its potential returns per unit of risk. Maquia Capital Acquisition is currently generating about 0.01 per unit of risk. If you would invest  1,006  in Vector Acquisition II on September 18, 2024 and sell it today you would earn a total of  59.00  from holding Vector Acquisition II or generate 5.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	35.75%
Values	Daily Returns

Vector Acquisition II  vs.  Maquia Capital Acquisition

Vector Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vector Acquisition II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Vector Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Maquia Capital Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vector Acquisition and Maquia Capital

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

The idea behind Vector Acquisition II and Maquia Capital 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.