Correlation Between Eureka Acquisition and Clover Leaf

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

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

Diversification Opportunities for Eureka Acquisition and Clover Leaf

0.79

Correlation Coefficient

Eureka Acquisition  Clover Leaf

Poor diversification

The 3 months correlation between Eureka and Clover is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eureka Acquisition Corp and Clover Leaf Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Leaf Capital and Eureka 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 Eureka Acquisition Corp are associated (or correlated) with Clover Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Leaf Capital has no effect on the direction of Eureka Acquisition i.e., Eureka Acquisition and Clover Leaf go up and down completely randomly.

Pair Corralation between Eureka Acquisition and Clover Leaf

If you would invest  1,006  in Eureka Acquisition Corp on September 29, 2024 and sell it today you would earn a total of  9.00  from holding Eureka Acquisition Corp or generate 0.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Eureka Acquisition Corp  vs.  Clover Leaf Capital

Eureka Acquisition Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eureka Acquisition Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Eureka Acquisition is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Clover Leaf Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clover Leaf Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Clover Leaf 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 Eureka Acquisition and Clover Leaf

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

The idea behind Eureka Acquisition Corp and Clover Leaf Capital 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.