Correlation Between American Acquisition and Corner Growth

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

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

Diversification Opportunities for American Acquisition and Corner Growth

0.08

Correlation Coefficient

American Acquisition  Corner Growth

Significant diversification

The 3 months correlation between American and Corner is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding American Acquisition Opportuni and Corner Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corner Growth Acquisition and American 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 American Acquisition Opportunity are associated (or correlated) with Corner Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corner Growth Acquisition has no effect on the direction of American Acquisition i.e., American Acquisition and Corner Growth go up and down completely randomly.

Pair Corralation between American Acquisition and Corner Growth

Assuming the 90 days horizon American Acquisition is expected to generate 1.2 times less return on investment than Corner Growth. In addition to that, American Acquisition is 1.58 times more volatile than Corner Growth Acquisition. It trades about 0.05 of its total potential returns per unit of risk. Corner Growth Acquisition is currently generating about 0.09 per unit of volatility. If you would invest  10.00  in Corner Growth Acquisition on September 17, 2024 and sell it today you would earn a total of  11.00  from holding Corner Growth Acquisition or generate 110.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	12.24%
Values	Daily Returns

American Acquisition Opportuni  vs.  Corner Growth Acquisition

American Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Corner Growth Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with American Acquisition and Corner Growth

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

The idea behind American Acquisition Opportunity and Corner Growth 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.