Correlation Between AA Mission and Voyager Acquisition

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

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

Diversification Opportunities for AA Mission and Voyager Acquisition

0.44

Correlation Coefficient

AA Mission  Voyager Acquisition

Very weak diversification

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

Pair Corralation between AA Mission and Voyager Acquisition

Considering the 90-day investment horizon AA Mission Acquisition is expected to generate 0.6 times more return on investment than Voyager Acquisition. However, AA Mission Acquisition is 1.66 times less risky than Voyager Acquisition. It trades about 0.16 of its potential returns per unit of risk. Voyager Acquisition Corp is currently generating about 0.06 per unit of risk. If you would invest  999.00  in AA Mission Acquisition on September 23, 2024 and sell it today you would earn a total of  9.00  from holding AA Mission Acquisition or generate 0.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.31%
Values	Daily Returns

AA Mission Acquisition  vs.  Voyager Acquisition Corp

AA Mission Acquisition

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AA Mission Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AA Mission is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Voyager Acquisition Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with AA Mission and Voyager Acquisition

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

The idea behind AA Mission Acquisition and Voyager 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.