Correlation Between Waldencast Acquisition and Docebo

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

Diversification Opportunities for Waldencast Acquisition and Docebo

-0.57

Correlation Coefficient

Waldencast Acquisition  Docebo

Excellent diversification

The 3 months correlation between Waldencast and Docebo is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Docebo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Docebo 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 Docebo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Docebo Inc has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and Docebo go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and Docebo

Assuming the 90 days horizon Waldencast Acquisition Corp is expected to generate 6.17 times more return on investment than Docebo. However, Waldencast Acquisition is 6.17 times more volatile than Docebo Inc. It trades about 0.04 of its potential returns per unit of risk. Docebo Inc is currently generating about 0.13 per unit of risk. If you would invest  12.00  in Waldencast Acquisition Corp on August 31, 2024 and sell it today you would lose (1.00) from holding Waldencast Acquisition Corp or give up 8.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Waldencast Acquisition Corp  vs.  Docebo Inc

Waldencast Acquisition

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Waldencast Acquisition Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Waldencast Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Docebo Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Docebo Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Docebo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Waldencast Acquisition and Docebo

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

The idea behind Waldencast Acquisition Corp and Docebo 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.