Correlation Between Waldencast Acquisition and Omniq Corp

Can any of the company-specific risk be diversified away by investing in both Waldencast Acquisition and Omniq Corp 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 Omniq Corp 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 Omniq Corp, you can compare the effects of market volatilities on Waldencast Acquisition and Omniq Corp 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 Omniq Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waldencast Acquisition and Omniq Corp.

Diversification Opportunities for Waldencast Acquisition and Omniq Corp

0.67

Correlation Coefficient

Waldencast Acquisition  Omniq Corp

Poor diversification

The 3 months correlation between Waldencast and Omniq is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Omniq Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omniq Corp 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 Omniq Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omniq Corp has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and Omniq Corp go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and Omniq Corp

If you would invest  301.00  in Waldencast Acquisition Corp on September 2, 2024 and sell it today you would earn a total of  37.00  from holding Waldencast Acquisition Corp or generate 12.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Waldencast Acquisition Corp  vs.  Omniq Corp

Waldencast Acquisition

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Waldencast Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Waldencast Acquisition exhibited solid returns over the last few months and may actually be approaching a breakup point.

Omniq Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omniq Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Omniq Corp 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 Waldencast Acquisition and Omniq Corp

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

The idea behind Waldencast Acquisition Corp and Omniq Corp 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.