Correlation Between WinVest Acquisition and Revelstone Capital

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

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

Diversification Opportunities for WinVest Acquisition and Revelstone Capital

0.38

Correlation Coefficient

WinVest Acquisition  Revelstone Capital

Weak diversification

The 3 months correlation between WinVest and Revelstone is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding WinVest Acquisition Corp and Revelstone Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revelstone Capital and WinVest 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 WinVest Acquisition Corp are associated (or correlated) with Revelstone Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revelstone Capital has no effect on the direction of WinVest Acquisition i.e., WinVest Acquisition and Revelstone Capital go up and down completely randomly.

Pair Corralation between WinVest Acquisition and Revelstone Capital

Given the investment horizon of 90 days WinVest Acquisition Corp is expected to generate 5.02 times more return on investment than Revelstone Capital. However, WinVest Acquisition is 5.02 times more volatile than Revelstone Capital Acquisition. It trades about 0.04 of its potential returns per unit of risk. Revelstone Capital Acquisition is currently generating about 0.17 per unit of risk. If you would invest  1,036  in WinVest Acquisition Corp on September 20, 2024 and sell it today you would earn a total of  145.00  from holding WinVest Acquisition Corp or generate 14.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	28.43%
Values	Daily Returns

WinVest Acquisition Corp  vs.  Revelstone Capital Acquisition

WinVest Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Revelstone Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Revelstone Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Revelstone Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with WinVest Acquisition and Revelstone Capital

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

The idea behind WinVest Acquisition Corp and Revelstone Capital 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.