Correlation Between LatAmGrowth SPAC and Accretion Acquisition

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

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

Diversification Opportunities for LatAmGrowth SPAC and Accretion Acquisition

0.13

Correlation Coefficient

LatAmGrowth SPAC  Accretion Acquisition

Average diversification

The 3 months correlation between LatAmGrowth and Accretion is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding LatAmGrowth SPAC Warrants and Accretion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accretion Acquisition and LatAmGrowth SPAC 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 LatAmGrowth SPAC Warrants are associated (or correlated) with Accretion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accretion Acquisition has no effect on the direction of LatAmGrowth SPAC i.e., LatAmGrowth SPAC and Accretion Acquisition go up and down completely randomly.

Pair Corralation between LatAmGrowth SPAC and Accretion Acquisition

Assuming the 90 days horizon LatAmGrowth SPAC Warrants is expected to generate 1.25 times more return on investment than Accretion Acquisition. However, LatAmGrowth SPAC is 1.25 times more volatile than Accretion Acquisition Corp. It trades about 0.12 of its potential returns per unit of risk. Accretion Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest  10.00  in LatAmGrowth SPAC Warrants on September 15, 2024 and sell it today you would lose (7.10) from holding LatAmGrowth SPAC Warrants or give up 71.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	78.3%
Values	Daily Returns

LatAmGrowth SPAC Warrants  vs.  Accretion Acquisition Corp

LatAmGrowth SPAC Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

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

Accretion Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accretion Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Accretion Acquisition 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 LatAmGrowth SPAC and Accretion Acquisition

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

The idea behind LatAmGrowth SPAC Warrants and Accretion Acquisition Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..