Correlation Between Via Renewables and A SPAC

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

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

Diversification Opportunities for Via Renewables and A SPAC

-0.39

Correlation Coefficient

Via Renewables  A SPAC

Very good diversification

The 3 months correlation between Via and ASCB is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and A SPAC II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A SPAC II and Via Renewables 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 Via Renewables are associated (or correlated) with A SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A SPAC II has no effect on the direction of Via Renewables i.e., Via Renewables and A SPAC go up and down completely randomly.

Pair Corralation between Via Renewables and A SPAC

Assuming the 90 days horizon Via Renewables is expected to generate 15.36 times more return on investment than A SPAC. However, Via Renewables is 15.36 times more volatile than A SPAC II. It trades about 0.34 of its potential returns per unit of risk. A SPAC II is currently generating about -0.1 per unit of risk. If you would invest  1,959  in Via Renewables on September 28, 2024 and sell it today you would earn a total of  403.00  from holding Via Renewables or generate 20.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Via Renewables  vs.  A SPAC II

Via Renewables

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

A SPAC II

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Via Renewables and A SPAC

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

The idea behind Via Renewables and A SPAC II 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.