Correlation Between Futuretech and Trailblazer Merger

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

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

Diversification Opportunities for Futuretech and Trailblazer Merger

-0.27

Correlation Coefficient

Futuretech  Trailblazer Merger

Very good diversification

The 3 months correlation between Futuretech and Trailblazer is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Futuretech II Acquisition and Trailblazer Merger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trailblazer Merger and Futuretech 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 Futuretech II Acquisition are associated (or correlated) with Trailblazer Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trailblazer Merger has no effect on the direction of Futuretech i.e., Futuretech and Trailblazer Merger go up and down completely randomly.

Pair Corralation between Futuretech and Trailblazer Merger

Given the investment horizon of 90 days Futuretech II Acquisition is expected to under-perform the Trailblazer Merger. But the stock apears to be less risky and, when comparing its historical volatility, Futuretech II Acquisition is 2.65 times less risky than Trailblazer Merger. The stock trades about -0.12 of its potential returns per unit of risk. The Trailblazer Merger is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,161  in Trailblazer Merger on August 19, 2025 and sell it today you would earn a total of  18.00  from holding Trailblazer Merger or generate 1.55% return on investment over 90 days.

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

Futuretech II Acquisition  vs.  Trailblazer Merger

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.

Trailblazer Merger

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trailblazer Merger are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Trailblazer Merger is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Futuretech and Trailblazer Merger

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

The idea behind Futuretech II Acquisition and Trailblazer Merger 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.