Correlation Between Sculptor Acquisition and Berenson Acquisition

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

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

Diversification Opportunities for Sculptor Acquisition and Berenson Acquisition

-0.53

Correlation Coefficient

Sculptor Acquisition  Berenson Acquisition

Excellent diversification

The 3 months correlation between Sculptor and Berenson is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sculptor Acquisition Corp and Berenson Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berenson Acquisition Corp and Sculptor 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 Sculptor Acquisition Corp are associated (or correlated) with Berenson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berenson Acquisition Corp has no effect on the direction of Sculptor Acquisition i.e., Sculptor Acquisition and Berenson Acquisition go up and down completely randomly.

Pair Corralation between Sculptor Acquisition and Berenson Acquisition

If you would invest  1,060  in Berenson Acquisition Corp on September 5, 2024 and sell it today you would earn a total of  4.00  from holding Berenson Acquisition Corp or generate 0.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Sculptor Acquisition Corp  vs.  Berenson Acquisition Corp

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.

Berenson Acquisition Corp

Risk-Adjusted Performance

0 of 100

Modest

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

Pair Trading with Sculptor Acquisition and Berenson Acquisition

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

The idea behind Sculptor Acquisition Corp and Berenson 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.