Correlation Between Prime Number and Mars Acquisition

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

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

Diversification Opportunities for Prime Number and Mars Acquisition

-0.33

Correlation Coefficient

Prime Number  Mars Acquisition

Very good diversification

The 3 months correlation between Prime and Mars is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Prime Number Acquisition and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp and Prime Number 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 Prime Number Acquisition are associated (or correlated) with Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Prime Number i.e., Prime Number and Mars Acquisition go up and down completely randomly.

Pair Corralation between Prime Number and Mars Acquisition

Given the investment horizon of 90 days Prime Number Acquisition is expected to generate 0.1 times more return on investment than Mars Acquisition. However, Prime Number Acquisition is 10.19 times less risky than Mars Acquisition. It trades about 0.13 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about -0.01 per unit of risk. If you would invest  1,017  in Prime Number Acquisition on September 26, 2024 and sell it today you would earn a total of  40.00  from holding Prime Number Acquisition or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	29.15%
Values	Daily Returns

Prime Number Acquisition  vs.  Mars Acquisition Corp

Prime Number Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prime Number Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Prime Number is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Mars Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mars Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Prime Number and Mars Acquisition

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

The idea behind Prime Number Acquisition and Mars 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.