Correlation Between Waldencast Acquisition and Sustainable Development

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

Diversification Opportunities for Waldencast Acquisition and Sustainable Development

-0.28

Correlation Coefficient

Waldencast Acquisition  Sustainable Development

Very good diversification

The 3 months correlation between Waldencast and Sustainable is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Sustainable Development Acquis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sustainable Development 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 Sustainable Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sustainable Development has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and Sustainable Development go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and Sustainable Development

If you would invest  11.00  in Waldencast Acquisition Corp on October 12, 2024 and sell it today you would earn a total of  4.00  from holding Waldencast Acquisition Corp or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Waldencast Acquisition Corp  vs.  Sustainable Development Acquis

Waldencast Acquisition

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Waldencast Acquisition Corp are ranked lower than 7 (%) 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.

Sustainable Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sustainable Development Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Sustainable Development is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Waldencast Acquisition and Sustainable Development

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

The idea behind Waldencast Acquisition Corp and Sustainable Development 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.