Correlation Between DMY Squared and Futuretech

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

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

Diversification Opportunities for DMY Squared and Futuretech

-0.01

Correlation Coefficient

DMY Squared  Futuretech

Good diversification

The 3 months correlation between DMY and Futuretech is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding dMY Squared Technology and Futuretech II Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futuretech II Acquisition and DMY Squared 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 dMY Squared Technology are associated (or correlated) with Futuretech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futuretech II Acquisition has no effect on the direction of DMY Squared i.e., DMY Squared and Futuretech go up and down completely randomly.

Pair Corralation between DMY Squared and Futuretech

Given the investment horizon of 90 days dMY Squared Technology is expected to under-perform the Futuretech. In addition to that, DMY Squared is 10.42 times more volatile than Futuretech II Acquisition. It trades about -0.02 of its total potential returns per unit of risk. Futuretech II Acquisition is currently generating about -0.13 per unit of volatility. If you would invest  1,230  in Futuretech II Acquisition on August 23, 2025 and sell it today you would lose (28.00) from holding Futuretech II Acquisition or give up 2.28% of portfolio value over 90 days.

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

dMY Squared Technology  vs.  Futuretech II Acquisition

dMY Squared Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days dMY Squared Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, DMY Squared is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Futuretech II Acquisition

Risk-Adjusted Performance

Weakest

Over the last 90 days Futuretech II Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Futuretech is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with DMY Squared and Futuretech

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

The idea behind dMY Squared Technology and Futuretech II 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.