Correlation Between Proof Acquisition and Engage Mobility

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

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

Diversification Opportunities for Proof Acquisition and Engage Mobility

-0.86

Correlation Coefficient

Proof Acquisition  Engage Mobility

Pay attention - limited upside

The 3 months correlation between Proof and Engage is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Proof Acquisition I and Engage Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engage Mobility and Proof 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 Proof Acquisition I are associated (or correlated) with Engage Mobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engage Mobility has no effect on the direction of Proof Acquisition i.e., Proof Acquisition and Engage Mobility go up and down completely randomly.

Pair Corralation between Proof Acquisition and Engage Mobility

Given the investment horizon of 90 days Proof Acquisition I is expected to generate 0.01 times more return on investment than Engage Mobility. However, Proof Acquisition I is 94.09 times less risky than Engage Mobility. It trades about 0.22 of its potential returns per unit of risk. Engage Mobility is currently generating about 0.0 per unit of risk. If you would invest  1,009  in Proof Acquisition I on September 2, 2024 and sell it today you would earn a total of  48.00  from holding Proof Acquisition I or generate 4.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Proof Acquisition I  vs.  Engage Mobility

Proof Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proof Acquisition I has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Proof Acquisition is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Engage Mobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Engage Mobility has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Engage Mobility is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Proof Acquisition and Engage Mobility

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

The idea behind Proof Acquisition I and Engage Mobility 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.