Correlation Between Elliott Opportunity and Consilium Acquisition

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

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

Diversification Opportunities for Elliott Opportunity and Consilium Acquisition

0.5

Correlation Coefficient

Elliott Opportunity  Consilium Acquisition

Very weak diversification

The 3 months correlation between Elliott and Consilium is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Elliott Opportunity II and Consilium Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consilium Acquisition and Elliott Opportunity 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 Elliott Opportunity II are associated (or correlated) with Consilium Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consilium Acquisition has no effect on the direction of Elliott Opportunity i.e., Elliott Opportunity and Consilium Acquisition go up and down completely randomly.

Pair Corralation between Elliott Opportunity and Consilium Acquisition

If you would invest  1,135  in Consilium Acquisition I on September 28, 2024 and sell it today you would earn a total of  14.00  from holding Consilium Acquisition I or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

Elliott Opportunity II  vs.  Consilium Acquisition I

Elliott Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

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

Consilium Acquisition

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Consilium Acquisition I are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Consilium Acquisition is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Elliott Opportunity and Consilium Acquisition

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

The idea behind Elliott Opportunity II and Consilium Acquisition I 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.