Correlation Between Ab E and Vivaldi Merger

Can any of the company-specific risk be diversified away by investing in both Ab E and Vivaldi Merger 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 Ab E and Vivaldi Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab E Opportunities and Vivaldi Merger Arbitrage, you can compare the effects of market volatilities on Ab E and Vivaldi Merger 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 Ab E with a short position of Vivaldi Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab E and Vivaldi Merger.

Diversification Opportunities for Ab E and Vivaldi Merger

0.79

Correlation Coefficient

Ab E  Vivaldi Merger

Poor diversification

The 3 months correlation between ADGAX and Vivaldi is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ab E Opportunities and Vivaldi Merger Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivaldi Merger Arbitrage and Ab E 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 Ab E Opportunities are associated (or correlated) with Vivaldi Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivaldi Merger Arbitrage has no effect on the direction of Ab E i.e., Ab E and Vivaldi Merger go up and down completely randomly.

Pair Corralation between Ab E and Vivaldi Merger

Assuming the 90 days horizon Ab E Opportunities is expected to generate 6.83 times more return on investment than Vivaldi Merger. However, Ab E is 6.83 times more volatile than Vivaldi Merger Arbitrage. It trades about 0.22 of its potential returns per unit of risk. Vivaldi Merger Arbitrage is currently generating about 0.17 per unit of risk. If you would invest  2,343  in Ab E Opportunities on May 18, 2025 and sell it today you would earn a total of  234.00  from holding Ab E Opportunities or generate 9.99% return on investment over 90 days.

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

Ab E Opportunities  vs.  Vivaldi Merger Arbitrage

Ab E Opportunities

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab E Opportunities are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab E may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vivaldi Merger Arbitrage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vivaldi Merger Arbitrage are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Vivaldi Merger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab E and Vivaldi Merger

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

The idea behind Ab E Opportunities and Vivaldi Merger Arbitrage 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.