Correlation Between Viveon Health and LatAmGrowth SPAC

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

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

Diversification Opportunities for Viveon Health and LatAmGrowth SPAC

0.23

Correlation Coefficient

Viveon Health  LatAmGrowth SPAC

Modest diversification

The 3 months correlation between Viveon and LatAmGrowth is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Viveon Health Acquisition and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC and Viveon Health 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 Viveon Health Acquisition are associated (or correlated) with LatAmGrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LatAmGrowth SPAC has no effect on the direction of Viveon Health i.e., Viveon Health and LatAmGrowth SPAC go up and down completely randomly.

Pair Corralation between Viveon Health and LatAmGrowth SPAC

If you would invest  1,150  in LatAmGrowth SPAC on September 16, 2024 and sell it today you would earn a total of  27.00  from holding LatAmGrowth SPAC or generate 2.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Viveon Health Acquisition  vs.  LatAmGrowth SPAC

Viveon Health Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viveon Health Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Viveon Health is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

LatAmGrowth SPAC

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in LatAmGrowth SPAC are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, LatAmGrowth SPAC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Viveon Health and LatAmGrowth SPAC

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

The idea behind Viveon Health Acquisition and LatAmGrowth SPAC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.