Correlation Between Aston Martin and Compass Digital

Can any of the company-specific risk be diversified away by investing in both Aston Martin and Compass Digital 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 Aston Martin and Compass Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Aston Martin and Compass Digital

-0.03

Correlation Coefficient

Aston Martin  Compass Digital

Good diversification

The 3 months correlation between Aston and Compass is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Aston Martin Lagonda and Compass Digital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Digital Acqu and Aston Martin 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 Aston Martin Lagonda are associated (or correlated) with Compass Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Digital Acqu has no effect on the direction of Aston Martin i.e., Aston Martin and Compass Digital go up and down completely randomly.

Pair Corralation between Aston Martin and Compass Digital

If you would invest  193.00  in Aston Martin Lagonda on April 12, 2024 and sell it today you would earn a total of  13.00  from holding Aston Martin Lagonda or generate 6.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aston Martin Lagonda  vs.  Compass Digital Acquisition

Aston Martin Lagonda

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aston Martin Lagonda are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Aston Martin may actually be approaching a critical reversion point that can send shares even higher in August 2024.

Compass Digital Acqu

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Compass Digital Acquisition are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Compass Digital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Aston Martin and Compass Digital

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

The idea behind Aston Martin Lagonda and Compass Digital Acquisition 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.