Correlation Between Inflection Point and Patria Investments

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

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

Diversification Opportunities for Inflection Point and Patria Investments

-0.49

Correlation Coefficient

Inflection Point  Patria Investments

Very good diversification

The 3 months correlation between Inflection and Patria is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Patria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Investments and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Patria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Investments has no effect on the direction of Inflection Point i.e., Inflection Point and Patria Investments go up and down completely randomly.

Pair Corralation between Inflection Point and Patria Investments

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 0.16 times more return on investment than Patria Investments. However, Inflection Point Acquisition is 6.1 times less risky than Patria Investments. It trades about 0.1 of its potential returns per unit of risk. Patria Investments is currently generating about -0.09 per unit of risk. If you would invest  1,065  in Inflection Point Acquisition on July 18, 2024 and sell it today you would earn a total of  21.00  from holding Inflection Point Acquisition or generate 1.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Inflection Point Acquisition  vs.  Patria Investments

Inflection Point Acq

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Inflection Point is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Patria Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patria Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Inflection Point and Patria Investments

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

The idea behind Inflection Point Acquisition and Patria Investments 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.