Correlation Between Waldencast Acquisition and GivBux

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

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

Diversification Opportunities for Waldencast Acquisition and GivBux

-0.09

Correlation Coefficient

Waldencast Acquisition  GivBux

Good diversification

The 3 months correlation between Waldencast and GivBux is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and GivBux Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GivBux Inc and Waldencast 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 Waldencast Acquisition Corp are associated (or correlated) with GivBux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GivBux Inc has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and GivBux go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and GivBux

Given the investment horizon of 90 days Waldencast Acquisition Corp is expected to under-perform the GivBux. But the stock apears to be less risky and, when comparing its historical volatility, Waldencast Acquisition Corp is 3.52 times less risky than GivBux. The stock trades about -0.04 of its potential returns per unit of risk. The GivBux Inc is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  53.00  in GivBux Inc on November 20, 2024 and sell it today you would earn a total of  687.00  from holding GivBux Inc or generate 1296.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.06%
Values	Daily Returns

Waldencast Acquisition Corp  vs.  GivBux Inc

Waldencast Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waldencast Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

GivBux Inc

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in GivBux Inc are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, GivBux showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Waldencast Acquisition and GivBux

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

The idea behind Waldencast Acquisition Corp and GivBux Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.