Correlation Between New Generation and Sculptor Acquisition

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

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

Diversification Opportunities for New Generation and Sculptor Acquisition

-0.45

Correlation Coefficient

New Generation  Sculptor Acquisition

Very good diversification

The 3 months correlation between New and Sculptor is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding New Generation Consumer and Sculptor Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sculptor Acquisition Corp and New Generation 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 New Generation Consumer are associated (or correlated) with Sculptor Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sculptor Acquisition Corp has no effect on the direction of New Generation i.e., New Generation and Sculptor Acquisition go up and down completely randomly.

Pair Corralation between New Generation and Sculptor Acquisition

If you would invest  0.06  in New Generation Consumer on September 18, 2024 and sell it today you would earn a total of  0.00  from holding New Generation Consumer or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

New Generation Consumer  vs.  Sculptor Acquisition Corp

New Generation Consumer

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in New Generation Consumer are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal fundamental indicators, New Generation reported solid returns over the last few months and may actually be approaching a breakup point.

Sculptor Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sculptor Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sculptor Acquisition is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with New Generation and Sculptor Acquisition

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

The idea behind New Generation Consumer and Sculptor 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..