Correlation Between Voyager Acquisition and Ares Acquisition

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

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

Diversification Opportunities for Voyager Acquisition and Ares Acquisition

0.18

Correlation Coefficient

Voyager Acquisition  Ares Acquisition

Average diversification

The 3 months correlation between Voyager and Ares is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Voyager Acquisition Corp and Ares Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Acquisition and Voyager 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 Voyager Acquisition Corp are associated (or correlated) with Ares Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Acquisition has no effect on the direction of Voyager Acquisition i.e., Voyager Acquisition and Ares Acquisition go up and down completely randomly.

Pair Corralation between Voyager Acquisition and Ares Acquisition

Given the investment horizon of 90 days Voyager Acquisition Corp is expected to generate 0.32 times more return on investment than Ares Acquisition. However, Voyager Acquisition Corp is 3.16 times less risky than Ares Acquisition. It trades about 0.07 of its potential returns per unit of risk. Ares Acquisition is currently generating about 0.01 per unit of risk. If you would invest  997.00  in Voyager Acquisition Corp on September 18, 2024 and sell it today you would earn a total of  6.00  from holding Voyager Acquisition Corp or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	87.5%
Values	Daily Returns

Voyager Acquisition Corp  vs.  Ares Acquisition

Voyager Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Ares Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ares Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ares Acquisition is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Voyager Acquisition and Ares Acquisition

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

The idea behind Voyager Acquisition Corp and Ares 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.