Correlation Between Denali Capital and A SPAC

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

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

Diversification Opportunities for Denali Capital and A SPAC

-0.06

Correlation Coefficient

Denali Capital  A SPAC

Good diversification

The 3 months correlation between Denali and ASCBU is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Denali Capital Acquisition and A SPAC II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC II and Denali 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 Denali Capital Acquisition are associated (or correlated) with A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC II has no effect on the direction of Denali Capital i.e., Denali Capital and A SPAC go up and down completely randomly.

Pair Corralation between Denali Capital and A SPAC

Assuming the 90 days horizon Denali Capital Acquisition is expected to generate 0.15 times more return on investment than A SPAC. However, Denali Capital Acquisition is 6.72 times less risky than A SPAC. It trades about 0.16 of its potential returns per unit of risk. A SPAC II is currently generating about -0.33 per unit of risk. If you would invest  1,153  in Denali Capital Acquisition on September 16, 2024 and sell it today you would earn a total of  26.00  from holding Denali Capital Acquisition or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	13.85%
Values	Daily Returns

Denali Capital Acquisition  vs.  A SPAC II

Denali Capital Acqui

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Denali Capital Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Denali Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Denali Capital and A SPAC

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

The idea behind Denali Capital Acquisition and A SPAC II 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.