Correlation Between ExcelFin Acquisition and Enterprise

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

By analyzing existing cross correlation between ExcelFin Acquisition Corp and Enterprise 40 Technology, you can compare the effects of market volatilities on ExcelFin Acquisition and Enterprise 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 ExcelFin Acquisition with a short position of Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExcelFin Acquisition and Enterprise.

Diversification Opportunities for ExcelFin Acquisition and Enterprise

0.33

Correlation Coefficient

ExcelFin Acquisition  Enterprise

Weak diversification

The 3 months correlation between ExcelFin and Enterprise is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ExcelFin Acquisition Corp and Enterprise 40 Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise 40 Technology and ExcelFin 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 ExcelFin Acquisition Corp are associated (or correlated) with Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise 40 Technology has no effect on the direction of ExcelFin Acquisition i.e., ExcelFin Acquisition and Enterprise go up and down completely randomly.

Pair Corralation between ExcelFin Acquisition and Enterprise

If you would invest  1,075  in ExcelFin Acquisition Corp on September 19, 2024 and sell it today you would lose (15.00) from holding ExcelFin Acquisition Corp or give up 1.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.35%
Values	Daily Returns

ExcelFin Acquisition Corp  vs.  Enterprise 40 Technology

ExcelFin Acquisition Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ExcelFin Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, ExcelFin Acquisition unveiled solid returns over the last few months and may actually be approaching a breakup point.

Enterprise 40 Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enterprise 40 Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Enterprise 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 ExcelFin Acquisition and Enterprise

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

The idea behind ExcelFin Acquisition Corp and Enterprise 40 Technology 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.