Correlation Between Senior Connect and Corner Growth

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

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

Diversification Opportunities for Senior Connect and Corner Growth

-0.22

Correlation Coefficient

Senior Connect  Corner Growth

Very good diversification

The 3 months correlation between Senior and Corner is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Senior Connect Acquisition and Corner Growth Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corner Growth Acquisition and Senior Connect 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 Senior Connect Acquisition are associated (or correlated) with Corner Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corner Growth Acquisition has no effect on the direction of Senior Connect i.e., Senior Connect and Corner Growth go up and down completely randomly.

Pair Corralation between Senior Connect and Corner Growth

Assuming the 90 days horizon Senior Connect Acquisition is expected to generate 0.55 times more return on investment than Corner Growth. However, Senior Connect Acquisition is 1.8 times less risky than Corner Growth. It trades about 0.07 of its potential returns per unit of risk. Corner Growth Acquisition is currently generating about 0.03 per unit of risk. If you would invest  927.00  in Senior Connect Acquisition on September 20, 2024 and sell it today you would earn a total of  75.00  from holding Senior Connect Acquisition or generate 8.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	35.92%
Values	Daily Returns

Senior Connect Acquisition  vs.  Corner Growth Acquisition

Senior Connect Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senior Connect Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Senior Connect is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Corner Growth Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corner Growth Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Corner Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Senior Connect and Corner Growth

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

The idea behind Senior Connect Acquisition and Corner Growth 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.

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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 Valuation module to check real value of public entities based on technical and fundamental data.