Correlation Between FinTech Acquisition and Draper Oakwood
Can any of the company-specific risk be diversified away by investing in both FinTech Acquisition and Draper Oakwood 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 FinTech Acquisition and Draper Oakwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinTech Acquisition Corp and Draper Oakwood Technology, you can compare the effects of market volatilities on FinTech Acquisition and Draper Oakwood 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 FinTech Acquisition with a short position of Draper Oakwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinTech Acquisition and Draper Oakwood.
Diversification Opportunities for FinTech Acquisition and Draper Oakwood
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FinTech and Draper is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FinTech Acquisition Corp and Draper Oakwood Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draper Oakwood Technology and FinTech 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 FinTech Acquisition Corp are associated (or correlated) with Draper Oakwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draper Oakwood Technology has no effect on the direction of FinTech Acquisition i.e., FinTech Acquisition and Draper Oakwood go up and down completely randomly.
Pair Corralation between FinTech Acquisition and Draper Oakwood
If you would invest (100.00) in Draper Oakwood Technology on February 27, 2024 and sell it today you would earn a total of 100.00 from holding Draper Oakwood Technology or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FinTech Acquisition Corp vs. Draper Oakwood Technology
Performance |
Timeline |
FinTech Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Draper Oakwood Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
FinTech Acquisition and Draper Oakwood Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FinTech Acquisition and Draper Oakwood
The main advantage of trading using opposite FinTech Acquisition and Draper Oakwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinTech Acquisition position performs unexpectedly, Draper Oakwood 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 Draper Oakwood will offset losses from the drop in Draper Oakwood's long position.FinTech Acquisition vs. Nasdaq Inc | FinTech Acquisition vs. Ryanair Holdings PLC | FinTech Acquisition vs. Morgan Stanley | FinTech Acquisition vs. Frontier Group Holdings |
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Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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