Correlation Between Eureka Acquisition and Ladenburg Thalmann

Can any of the company-specific risk be diversified away by investing in both Eureka Acquisition and Ladenburg Thalmann 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 Ladenburg Thalmann 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 Ladenburg Thalmann Financial, you can compare the effects of market volatilities on Eureka Acquisition and Ladenburg Thalmann 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 Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eureka Acquisition and Ladenburg Thalmann.

Diversification Opportunities for Eureka Acquisition and Ladenburg Thalmann

0.79

Correlation Coefficient

Eureka Acquisition  Ladenburg Thalmann

Poor diversification

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

Pair Corralation between Eureka Acquisition and Ladenburg Thalmann

Given the investment horizon of 90 days Eureka Acquisition Corp is expected to generate 39.68 times more return on investment than Ladenburg Thalmann. However, Eureka Acquisition is 39.68 times more volatile than Ladenburg Thalmann Financial. It trades about 0.12 of its potential returns per unit of risk. Ladenburg Thalmann Financial is currently generating about 0.01 per unit of risk. If you would invest  0.00  in Eureka Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  1,015  from holding Eureka Acquisition Corp or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	48.59%
Values	Daily Returns

Eureka Acquisition Corp  vs.  Ladenburg Thalmann Financial

Eureka Acquisition Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eureka Acquisition Corp are ranked lower than 17 (%) 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.

Ladenburg Thalmann

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Eureka Acquisition and Ladenburg Thalmann

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

The idea behind Eureka Acquisition Corp and Ladenburg Thalmann Financial 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.