Correlation Between Integral Acquisition and Ares Acquisition

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

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

Diversification Opportunities for Integral Acquisition and Ares Acquisition

-0.38

Correlation Coefficient

Integral Acquisition  Ares Acquisition

Very good diversification

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

Pair Corralation between Integral Acquisition and Ares Acquisition

Assuming the 90 days horizon Integral Acquisition is expected to under-perform the Ares Acquisition. In addition to that, Integral Acquisition is 72.41 times more volatile than Ares Acquisition. It trades about -0.14 of its total potential returns per unit of risk. Ares Acquisition is currently generating about 0.01 per unit of volatility. If you would invest  1,090  in Ares Acquisition on September 18, 2024 and sell it today you would earn a total of  1.00  from holding Ares Acquisition or generate 0.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.88%
Values	Daily Returns

Integral Acquisition  vs.  Ares Acquisition

Integral Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ares Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ares Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ares Acquisition is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Integral Acquisition and Ares Acquisition

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

The idea behind Integral Acquisition and Ares 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.