Correlation Between Western Acquisition and Oaktree Acquisition

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

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

Diversification Opportunities for Western Acquisition and Oaktree Acquisition

-0.44

Correlation Coefficient

Western Acquisition  Oaktree Acquisition

Very good diversification

The 3 months correlation between Western and Oaktree is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Oaktree Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Acquisition Corp and Western 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 Western Acquisition Ventures are associated (or correlated) with Oaktree Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Acquisition Corp has no effect on the direction of Western Acquisition i.e., Western Acquisition and Oaktree Acquisition go up and down completely randomly.

Pair Corralation between Western Acquisition and Oaktree Acquisition

If you would invest  1,008  in Oaktree Acquisition Corp on September 21, 2024 and sell it today you would earn a total of  4.00  from holding Oaktree Acquisition Corp or generate 0.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Western Acquisition Ventures  vs.  Oaktree Acquisition Corp

Western Acquisition

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Western Acquisition Ventures are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Western Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Oaktree Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Oaktree Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Western Acquisition and Oaktree Acquisition

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

The idea behind Western Acquisition Ventures and Oaktree Acquisition 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.