Correlation Between SK Growth and Revelstone Capital

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

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

Diversification Opportunities for SK Growth and Revelstone Capital

0.91

Correlation Coefficient

SK Growth  Revelstone Capital

Almost no diversification

The 3 months correlation between SKGR and Revelstone is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding SK Growth Opportunities and Revelstone Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revelstone Capital and SK Growth 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 SK Growth Opportunities are associated (or correlated) with Revelstone Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revelstone Capital has no effect on the direction of SK Growth i.e., SK Growth and Revelstone Capital go up and down completely randomly.

Pair Corralation between SK Growth and Revelstone Capital

If you would invest  1,151  in SK Growth Opportunities on September 15, 2024 and sell it today you would earn a total of  12.00  from holding SK Growth Opportunities or generate 1.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	4.76%
Values	Daily Returns

SK Growth Opportunities  vs.  Revelstone Capital Acquisition

SK Growth Opportunities

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SK Growth Opportunities are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, SK Growth is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Revelstone Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SK Growth and Revelstone Capital

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

The idea behind SK Growth Opportunities and Revelstone Capital Acquisition 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.