Correlation Between UTA Acquisition and Semper Paratus

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

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

Diversification Opportunities for UTA Acquisition and Semper Paratus

0.12

Correlation Coefficient

UTA Acquisition  Semper Paratus

Average diversification

The 3 months correlation between UTA and Semper is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding UTA Acquisition Corp and Semper Paratus Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semper Paratus Acqui and UTA 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 UTA Acquisition Corp are associated (or correlated) with Semper Paratus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semper Paratus Acqui has no effect on the direction of UTA Acquisition i.e., UTA Acquisition and Semper Paratus go up and down completely randomly.

Pair Corralation between UTA Acquisition and Semper Paratus

Assuming the 90 days horizon UTA Acquisition is expected to generate 1.78 times less return on investment than Semper Paratus. But when comparing it to its historical volatility, UTA Acquisition Corp is 1.81 times less risky than Semper Paratus. It trades about 0.05 of its potential returns per unit of risk. Semper Paratus Acquisition is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,025  in Semper Paratus Acquisition on September 4, 2024 and sell it today you would earn a total of  74.00  from holding Semper Paratus Acquisition or generate 7.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.34%
Values	Daily Returns

UTA Acquisition Corp  vs.  Semper Paratus Acquisition

UTA Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Semper Paratus Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with UTA Acquisition and Semper Paratus

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

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