Correlation Between Embrace Change and Associated Capital

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

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

Diversification Opportunities for Embrace Change and Associated Capital

-0.52

Correlation Coefficient

Embrace Change  Associated Capital

Excellent diversification

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

Pair Corralation between Embrace Change and Associated Capital

Given the investment horizon of 90 days Embrace Change Acquisition is expected to generate 0.09 times more return on investment than Associated Capital. However, Embrace Change Acquisition is 10.6 times less risky than Associated Capital. It trades about 0.19 of its potential returns per unit of risk. Associated Capital Group is currently generating about -0.01 per unit of risk. If you would invest  998.00  in Embrace Change Acquisition on February 12, 2024 and sell it today you would earn a total of  126.00  from holding Embrace Change Acquisition or generate 12.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	81.85%
Values	Daily Returns

Embrace Change Acquisition  vs.  Associated Capital Group

Embrace Change Acqui

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Embrace Change Acquisition are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Embrace Change is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Associated Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Associated Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Associated Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Embrace Change and Associated Capital

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

The idea behind Embrace Change Acquisition and Associated Capital 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.