Correlation Between A SPAC and Oak Woods

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

By analyzing existing cross correlation between A SPAC II and Oak Woods Acquisition, you can compare the effects of market volatilities on A SPAC and Oak Woods 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 A SPAC with a short position of Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of A SPAC and Oak Woods.

Diversification Opportunities for A SPAC and Oak Woods

-0.76

Correlation Coefficient

A SPAC  Oak Woods

Pay attention - limited upside

The 3 months correlation between ASCB and Oak is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding A SPAC II and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition and A SPAC 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 A SPAC II are associated (or correlated) with Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of A SPAC i.e., A SPAC and Oak Woods go up and down completely randomly.

Pair Corralation between A SPAC and Oak Woods

Given the investment horizon of 90 days A SPAC II is expected to under-perform the Oak Woods. But the stock apears to be less risky and, when comparing its historical volatility, A SPAC II is 4.56 times less risky than Oak Woods. The stock trades about -0.13 of its potential returns per unit of risk. The Oak Woods Acquisition is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,113  in Oak Woods Acquisition on September 3, 2024 and sell it today you would earn a total of  37.00  from holding Oak Woods Acquisition or generate 3.32% return on investment over 90 days.

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

A SPAC II  vs.  Oak Woods Acquisition

A SPAC II

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oak Woods Acquisition

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oak Woods Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Oak Woods is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with A SPAC and Oak Woods

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

The idea behind A SPAC II and Oak Woods 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.