Correlation Between 26 Capital and Concord Acquisition

Can any of the company-specific risk be diversified away by investing in both 26 Capital and Concord 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 26 Capital and Concord Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 26 Capital Acquisition and Concord Acquisition Corp, you can compare the effects of market volatilities on 26 Capital and Concord 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 26 Capital with a short position of Concord Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26 Capital and Concord Acquisition.

Diversification Opportunities for 26 Capital and Concord Acquisition

-0.11

Correlation Coefficient

26 Capital  Concord Acquisition

Good diversification

The 3 months correlation between ADER and Concord is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding 26 Capital Acquisition and Concord Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Acquisition Corp and 26 Capital 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 26 Capital Acquisition are associated (or correlated) with Concord Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Acquisition Corp has no effect on the direction of 26 Capital i.e., 26 Capital and Concord Acquisition go up and down completely randomly.

Pair Corralation between 26 Capital and Concord Acquisition

Given the investment horizon of 90 days 26 Capital Acquisition is expected to generate 6.8 times more return on investment than Concord Acquisition. However, 26 Capital is 6.8 times more volatile than Concord Acquisition Corp. It trades about 0.15 of its potential returns per unit of risk. Concord Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest  1,013  in 26 Capital Acquisition on September 26, 2024 and sell it today you would earn a total of  125.00  from holding 26 Capital Acquisition or generate 12.34% return on investment over 90 days.

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

26 Capital Acquisition  vs.  Concord Acquisition Corp

26 Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 26 Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, 26 Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Concord Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Concord Acquisition is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 26 Capital and Concord Acquisition

The main advantage of trading using opposite 26 Capital and Concord Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26 Capital position performs unexpectedly, Concord 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 Concord Acquisition will offset losses from the drop in Concord Acquisition's long position.

The idea behind 26 Capital Acquisition and Concord 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.