Correlation Between Embrace Change and Advanced Proteome

Can any of the company-specific risk be diversified away by investing in both Embrace Change and Advanced Proteome 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 Advanced Proteome 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 Advanced Proteome Therapeutics, you can compare the effects of market volatilities on Embrace Change and Advanced Proteome 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 Advanced Proteome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embrace Change and Advanced Proteome.

Diversification Opportunities for Embrace Change and Advanced Proteome

0.0

Correlation Coefficient

Embrace Change  Advanced Proteome

Pay attention - limited upside

The 3 months correlation between Embrace and Advanced is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Embrace Change Acquisition and Advanced Proteome Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Proteome 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 Advanced Proteome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Proteome has no effect on the direction of Embrace Change i.e., Embrace Change and Advanced Proteome go up and down completely randomly.

Pair Corralation between Embrace Change and Advanced Proteome

Given the investment horizon of 90 days Embrace Change Acquisition is expected to generate 0.03 times more return on investment than Advanced Proteome. However, Embrace Change Acquisition is 33.09 times less risky than Advanced Proteome. It trades about 0.18 of its potential returns per unit of risk. Advanced Proteome Therapeutics is currently generating about -0.06 per unit of risk. If you would invest  998.00  in Embrace Change Acquisition on June 22, 2024 and sell it today you would earn a total of  154.00  from holding Embrace Change Acquisition or generate 15.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Embrace Change Acquisition  vs.  Advanced Proteome Therapeutics

Embrace Change Acqui

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Embrace Change Acquisition are ranked lower than 12 (%) 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.

Advanced Proteome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advanced Proteome Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Advanced Proteome is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Embrace Change and Advanced Proteome

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

The idea behind Embrace Change Acquisition and Advanced Proteome Therapeutics 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.