Correlation Between Launch One and Voyager Acquisition

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

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

Diversification Opportunities for Launch One and Voyager Acquisition

0.03

Correlation Coefficient

Launch One  Voyager Acquisition

Significant diversification

The 3 months correlation between Launch and Voyager is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Launch One Acquisition and Voyager Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voyager Acquisition Corp and Launch One 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 Launch One Acquisition are associated (or correlated) with Voyager Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voyager Acquisition Corp has no effect on the direction of Launch One i.e., Launch One and Voyager Acquisition go up and down completely randomly.

Pair Corralation between Launch One and Voyager Acquisition

Assuming the 90 days horizon Launch One Acquisition is expected to generate 97.03 times more return on investment than Voyager Acquisition. However, Launch One is 97.03 times more volatile than Voyager Acquisition Corp. It trades about 0.08 of its potential returns per unit of risk. Voyager Acquisition Corp is currently generating about 0.07 per unit of risk. If you would invest  8.19  in Launch One Acquisition on September 29, 2024 and sell it today you would earn a total of  0.81  from holding Launch One Acquisition or generate 9.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	53.97%
Values	Daily Returns

Launch One Acquisition  vs.  Voyager Acquisition Corp

Launch One Acquisition

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Launch One Acquisition are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Launch One showed solid returns over the last few months and may actually be approaching a breakup point.

Voyager Acquisition Corp

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Launch One and Voyager Acquisition

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

The idea behind Launch One Acquisition and Voyager 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.