Correlation Between Pearl Holdings and A SPAC

Can any of the company-specific risk be diversified away by investing in both Pearl Holdings and A SPAC 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 Pearl Holdings and A SPAC into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Pearl Holdings and A SPAC

0.52

Correlation Coefficient

Pearl Holdings  A SPAC

Very weak diversification

The 3 months correlation between Pearl and ASCA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pearl Holdings Acquisition and A SPAC I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC I and Pearl Holdings 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 Pearl Holdings Acquisition are associated (or correlated) with A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC I has no effect on the direction of Pearl Holdings i.e., Pearl Holdings and A SPAC go up and down completely randomly.

Pair Corralation between Pearl Holdings and A SPAC

If you would invest  1,114  in Pearl Holdings Acquisition on September 16, 2024 and sell it today you would earn a total of  133.00  from holding Pearl Holdings Acquisition or generate 11.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Pearl Holdings Acquisition  vs.  A SPAC I

Pearl Holdings Acqui

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pearl Holdings Acquisition are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal essential indicators, Pearl Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

A SPAC I

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pearl Holdings and A SPAC

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

The idea behind Pearl Holdings Acquisition and A SPAC I 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.