Correlation Between Waldencast Acquisition and Arbe Robotics

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

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

Diversification Opportunities for Waldencast Acquisition and Arbe Robotics

-0.24

Correlation Coefficient

Waldencast Acquisition  Arbe Robotics

Very good diversification

The 3 months correlation between Waldencast and Arbe is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Waldencast Acquisition Corp and Arbe Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbe Robotics and Waldencast Acquisition 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 Waldencast Acquisition Corp are associated (or correlated) with Arbe Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbe Robotics has no effect on the direction of Waldencast Acquisition i.e., Waldencast Acquisition and Arbe Robotics go up and down completely randomly.

Pair Corralation between Waldencast Acquisition and Arbe Robotics

Given the investment horizon of 90 days Waldencast Acquisition Corp is expected to generate 0.91 times more return on investment than Arbe Robotics. However, Waldencast Acquisition Corp is 1.1 times less risky than Arbe Robotics. It trades about -0.01 of its potential returns per unit of risk. Arbe Robotics is currently generating about -0.14 per unit of risk. If you would invest  192.00  in Waldencast Acquisition Corp on October 6, 2025 and sell it today you would lose (21.00) from holding Waldencast Acquisition Corp or give up 10.94% of portfolio value over 90 days.

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

Waldencast Acquisition Corp  vs.  Arbe Robotics

Waldencast Acquisition

Risk-Adjusted Performance

Weakest

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

Arbe Robotics

Risk-Adjusted Performance

Weakest

Over the last 90 days Arbe Robotics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in February 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Waldencast Acquisition and Arbe Robotics

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

The idea behind Waldencast Acquisition Corp and Arbe Robotics 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.