Correlation Between FG Merger and Signal Hill

Can any of the company-specific risk be diversified away by investing in both FG Merger and Signal Hill 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 FG Merger and Signal Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for FG Merger and Signal Hill

-0.38

Correlation Coefficient

FG Merger  Signal Hill

Very good diversification

The 3 months correlation between FGMC and Signal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FG Merger Corp and Signal Hill Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signal Hill Acquisition and FG Merger 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 FG Merger Corp are associated (or correlated) with Signal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signal Hill Acquisition has no effect on the direction of FG Merger i.e., FG Merger and Signal Hill go up and down completely randomly.

Pair Corralation between FG Merger and Signal Hill

If you would invest  0.09  in Signal Hill Acquisition on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Signal Hill Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FG Merger Corp  vs.  Signal Hill Acquisition

FG Merger Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Signal Hill Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FG Merger and Signal Hill

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

The idea behind FG Merger Corp and Signal Hill Acquisition 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.