Correlation Between Voyager Acquisition and SBC Medical

Can any of the company-specific risk be diversified away by investing in both Voyager Acquisition and SBC Medical 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 SBC Medical 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 SBC Medical Group, you can compare the effects of market volatilities on Voyager Acquisition and SBC Medical 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 SBC Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voyager Acquisition and SBC Medical.

Diversification Opportunities for Voyager Acquisition and SBC Medical

0.52

Correlation Coefficient

Voyager Acquisition  SBC Medical

Very weak diversification

The 3 months correlation between Voyager and SBC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Voyager Acquisition Corp and SBC Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBC Medical Group 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 SBC Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBC Medical Group has no effect on the direction of Voyager Acquisition i.e., Voyager Acquisition and SBC Medical go up and down completely randomly.

Pair Corralation between Voyager Acquisition and SBC Medical

Given the investment horizon of 90 days Voyager Acquisition is expected to generate 339.91 times less return on investment than SBC Medical. But when comparing it to its historical volatility, Voyager Acquisition Corp is 92.34 times less risky than SBC Medical. It trades about 0.07 of its potential returns per unit of risk. SBC Medical Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  7.31  in SBC Medical Group on September 3, 2024 and sell it today you would earn a total of  26.69  from holding SBC Medical Group or generate 365.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.33%
Values	Daily Returns

Voyager Acquisition Corp  vs.  SBC Medical Group

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 latest stock price confusion, may contribute to short-horizon losses for the traders.

SBC Medical Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SBC Medical Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, SBC Medical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voyager Acquisition and SBC Medical

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

The idea behind Voyager Acquisition Corp and SBC Medical Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.