Correlation Between Digital Health and A SPAC

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

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

Diversification Opportunities for Digital Health and A SPAC

-0.43

Correlation Coefficient

Digital Health  A SPAC

Very good diversification

The 3 months correlation between Digital and ASCB is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Digital Health 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 Digital Health 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 Digital Health 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 Digital Health i.e., Digital Health and A SPAC go up and down completely randomly.

Pair Corralation between Digital Health and A SPAC

If you would invest  1,211  in Digital Health Acquisition on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Digital Health Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Digital Health Acquisition  vs.  A SPAC II

Digital Health Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Health Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Digital Health is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Digital Health and A SPAC

The main advantage of trading using opposite Digital Health and A SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Health 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 Digital Health 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.