Correlation Between Univest Pennsylvania and Iris Acquisition

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

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

Diversification Opportunities for Univest Pennsylvania and Iris Acquisition

-0.75

Correlation Coefficient

Univest Pennsylvania  Iris Acquisition

Pay attention - limited upside

The 3 months correlation between Univest and Iris is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Iris Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Acquisition Corp and Univest Pennsylvania 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 Univest Pennsylvania are associated (or correlated) with Iris Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Acquisition Corp has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Iris Acquisition go up and down completely randomly.

Pair Corralation between Univest Pennsylvania and Iris Acquisition

Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 1.59 times more return on investment than Iris Acquisition. However, Univest Pennsylvania is 1.59 times more volatile than Iris Acquisition Corp. It trades about 0.13 of its potential returns per unit of risk. Iris Acquisition Corp is currently generating about -0.11 per unit of risk. If you would invest  2,135  in Univest Pennsylvania on September 22, 2024 and sell it today you would earn a total of  843.00  from holding Univest Pennsylvania or generate 39.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	44.09%
Values	Daily Returns

Univest Pennsylvania  vs.  Iris Acquisition Corp

Univest Pennsylvania

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Univest Pennsylvania are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Univest Pennsylvania may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Iris Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iris Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iris Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Univest Pennsylvania and Iris Acquisition

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

The idea behind Univest Pennsylvania and Iris 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 Transaction History module to view history of all your transactions and understand their impact on performance.