Correlation Between Senior Connect and Dune Acquisition

Can any of the company-specific risk be diversified away by investing in both Senior Connect and Dune 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 Senior Connect and Dune Acquisition 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 Dune Acquisition Corp, you can compare the effects of market volatilities on Senior Connect and Dune 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 Senior Connect with a short position of Dune Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senior Connect and Dune Acquisition.

Diversification Opportunities for Senior Connect and Dune Acquisition

-0.08

Correlation Coefficient

Senior Connect  Dune Acquisition

Good diversification

The 3 months correlation between Senior and Dune is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Senior Connect Acquisition and Dune Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dune Acquisition Corp 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 Dune Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dune Acquisition Corp has no effect on the direction of Senior Connect i.e., Senior Connect and Dune Acquisition go up and down completely randomly.

Pair Corralation between Senior Connect and Dune Acquisition

Assuming the 90 days horizon Senior Connect Acquisition is expected to generate 1.56 times more return on investment than Dune Acquisition. However, Senior Connect is 1.56 times more volatile than Dune Acquisition Corp. It trades about 0.07 of its potential returns per unit of risk. Dune Acquisition Corp is currently generating about 0.06 per unit of risk. If you would invest  927.00  in Senior Connect Acquisition on September 19, 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	95.74%
Values	Daily Returns

Senior Connect Acquisition  vs.  Dune Acquisition Corp

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.

Dune Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dune Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Dune Acquisition 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 Dune Acquisition

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

The idea behind Senior Connect Acquisition and Dune 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.