Correlation Between Talon 1 and ExcelFin Acquisition

Can any of the company-specific risk be diversified away by investing in both Talon 1 and ExcelFin 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 Talon 1 and ExcelFin Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Talon 1 Acquisition and ExcelFin Acquisition Corp, you can compare the effects of market volatilities on Talon 1 and ExcelFin 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 Talon 1 with a short position of ExcelFin Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Talon 1 and ExcelFin Acquisition.

Diversification Opportunities for Talon 1 and ExcelFin Acquisition

-0.14

Correlation Coefficient

Talon 1  ExcelFin Acquisition

Good diversification

The 3 months correlation between Talon and ExcelFin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Talon 1 Acquisition and ExcelFin Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExcelFin Acquisition Corp and Talon 1 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 Talon 1 Acquisition are associated (or correlated) with ExcelFin Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExcelFin Acquisition Corp has no effect on the direction of Talon 1 i.e., Talon 1 and ExcelFin Acquisition go up and down completely randomly.

Pair Corralation between Talon 1 and ExcelFin Acquisition

If you would invest  1,096  in ExcelFin Acquisition Corp on September 18, 2024 and sell it today you would lose (36.00) from holding ExcelFin Acquisition Corp or give up 3.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	7.69%
Values	Daily Returns

Talon 1 Acquisition  vs.  ExcelFin Acquisition Corp

Talon 1 Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Talon 1 Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Talon 1 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ExcelFin Acquisition Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ExcelFin Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively uncertain basic indicators, ExcelFin Acquisition unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Talon 1 and ExcelFin Acquisition

The main advantage of trading using opposite Talon 1 and ExcelFin Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Talon 1 position performs unexpectedly, ExcelFin 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 ExcelFin Acquisition will offset losses from the drop in ExcelFin Acquisition's long position.

The idea behind Talon 1 Acquisition and ExcelFin 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.