Correlation Between Brilliant Acquisition and Greenrose Acquisition

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

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

Diversification Opportunities for Brilliant Acquisition and Greenrose Acquisition

0.11

Correlation Coefficient

Brilliant Acquisition  Greenrose Acquisition

Average diversification

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

Pair Corralation between Brilliant Acquisition and Greenrose Acquisition

Assuming the 90 days horizon Brilliant Acquisition is expected to generate 1.82 times less return on investment than Greenrose Acquisition. But when comparing it to its historical volatility, Brilliant Acquisition is 1.82 times less risky than Greenrose Acquisition. It trades about 0.13 of its potential returns per unit of risk. Greenrose Acquisition Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4.08  in Greenrose Acquisition Corp on September 9, 2024 and sell it today you would lose (3.49) from holding Greenrose Acquisition Corp or give up 85.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.41%
Values	Daily Returns

Brilliant Acquisition  vs.  Greenrose Acquisition Corp

Brilliant Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Greenrose Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brilliant Acquisition and Greenrose Acquisition

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

The idea behind Brilliant Acquisition and Greenrose 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.