Correlation Between ACG Acquisition and Cairn Homes
Can any of the company-specific risk be diversified away by investing in both ACG Acquisition and Cairn Homes 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 ACG Acquisition and Cairn Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACG Acquisition Co and Cairn Homes PLC, you can compare the effects of market volatilities on ACG Acquisition and Cairn Homes 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 ACG Acquisition with a short position of Cairn Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACG Acquisition and Cairn Homes.
Diversification Opportunities for ACG Acquisition and Cairn Homes
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ACG and Cairn is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ACG Acquisition Co and Cairn Homes PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairn Homes PLC and ACG 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 ACG Acquisition Co are associated (or correlated) with Cairn Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairn Homes PLC has no effect on the direction of ACG Acquisition i.e., ACG Acquisition and Cairn Homes go up and down completely randomly.
Pair Corralation between ACG Acquisition and Cairn Homes
If you would invest 510.00 in ACG Acquisition Co on October 25, 2024 and sell it today you would earn a total of 0.00 from holding ACG Acquisition Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
ACG Acquisition Co vs. Cairn Homes PLC
Performance |
| Timeline |
| ACG Acquisition |
| Cairn Homes PLC |
ACG Acquisition and Cairn Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACG Acquisition and Cairn Homes
The main advantage of trading using opposite ACG Acquisition and Cairn Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACG Acquisition position performs unexpectedly, Cairn Homes 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 Cairn Homes will offset losses from the drop in Cairn Homes' long position.| ACG Acquisition vs. Cairn Homes PLC | ACG Acquisition vs. Tyson Foods Cl | ACG Acquisition vs. Dairy Farm International | ACG Acquisition vs. American Homes 4 |
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Check out your portfolio center.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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