Correlation Between Strategic Acquis and M3 Brigade

Can any of the company-specific risk be diversified away by investing in both Strategic Acquis and M3 Brigade 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 Strategic Acquis and M3 Brigade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Strategic Acquis and M3 Brigade Acquisition II, you can compare the effects of market volatilities on Strategic Acquis and M3 Brigade 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 Strategic Acquis with a short position of M3 Brigade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Acquis and M3 Brigade.

Diversification Opportunities for Strategic Acquis and M3 Brigade

0.0

Correlation Coefficient

Strategic Acquis  M3 Brigade

Pay attention - limited upside

The 3 months correlation between Strategic and MBAC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Acquis and M3 Brigade Acquisition II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M3 Brigade Acquisition and Strategic Acquis 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 Strategic Acquis are associated (or correlated) with M3 Brigade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M3 Brigade Acquisition has no effect on the direction of Strategic Acquis i.e., Strategic Acquis and M3 Brigade go up and down completely randomly.

Pair Corralation between Strategic Acquis and M3 Brigade

If you would invest  1,059  in M3 Brigade Acquisition II on January 26, 2024 and sell it today you would earn a total of  0.00  from holding M3 Brigade Acquisition II or generate 0.0% return on investment over 90 days.

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

Strategic Acquis  vs.  M3 Brigade Acquisition II

Strategic Acquis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Acquis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Strategic Acquis is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

M3 Brigade Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days M3 Brigade Acquisition II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, M3 Brigade is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Strategic Acquis and M3 Brigade

The main advantage of trading using opposite Strategic Acquis and M3 Brigade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Acquis position performs unexpectedly, M3 Brigade 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 M3 Brigade will offset losses from the drop in M3 Brigade's long position.

The idea behind Strategic Acquis and M3 Brigade Acquisition II 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.