Correlation Between Murphy Canyon and Signal Hill

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

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

Diversification Opportunities for Murphy Canyon and Signal Hill

0.79

Correlation Coefficient

Murphy Canyon  Signal Hill

Poor diversification

The 3 months correlation between Murphy and Signal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Murphy Canyon Acquisition 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 Murphy Canyon 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 Murphy Canyon Acquisition 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 Murphy Canyon i.e., Murphy Canyon and Signal Hill go up and down completely randomly.

Pair Corralation between Murphy Canyon and Signal Hill

If you would invest  1,042  in Signal Hill Acquisition on September 18, 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 Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Murphy Canyon Acquisition  vs.  Signal Hill Acquisition

Murphy Canyon Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Murphy Canyon Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Murphy Canyon is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 comparatively stable essential indicators, Signal Hill is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Murphy Canyon and Signal Hill

The main advantage of trading using opposite Murphy Canyon and Signal Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy Canyon 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 Murphy Canyon Acquisition 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.