Correlation Between Nocturne Acquisition and SLM Corp

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

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

Diversification Opportunities for Nocturne Acquisition and SLM Corp

-0.17

Correlation Coefficient

Nocturne Acquisition  SLM Corp

Good diversification

The 3 months correlation between Nocturne and SLM is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nocturne Acquisition Corp and SLM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLM Corp and Nocturne 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 Nocturne Acquisition Corp are associated (or correlated) with SLM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLM Corp has no effect on the direction of Nocturne Acquisition i.e., Nocturne Acquisition and SLM Corp go up and down completely randomly.

Pair Corralation between Nocturne Acquisition and SLM Corp

If you would invest  2,007  in SLM Corp on February 16, 2024 and sell it today you would earn a total of  126.00  from holding SLM Corp or generate 6.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Nocturne Acquisition Corp  vs.  SLM Corp

Nocturne Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

SLM Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SLM Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal essential indicators, SLM Corp may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Nocturne Acquisition and SLM Corp

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

The idea behind Nocturne Acquisition Corp and SLM Corp 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.