Correlation Between A SPAC and Catcha Investment
Can any of the company-specific risk be diversified away by investing in both A SPAC and Catcha Investment 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 A SPAC and Catcha Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A SPAC II and Catcha Investment Corp, you can compare the effects of market volatilities on A SPAC and Catcha Investment 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 A SPAC with a short position of Catcha Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of A SPAC and Catcha Investment.
Diversification Opportunities for A SPAC and Catcha Investment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASCB and Catcha is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding A SPAC II and Catcha Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcha Investment Corp and A SPAC 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 A SPAC II are associated (or correlated) with Catcha Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcha Investment Corp has no effect on the direction of A SPAC i.e., A SPAC and Catcha Investment go up and down completely randomly.
Pair Corralation between A SPAC and Catcha Investment
Given the investment horizon of 90 days A SPAC is expected to generate 1.82 times less return on investment than Catcha Investment. But when comparing it to its historical volatility, A SPAC II is 4.15 times less risky than Catcha Investment. It trades about 0.02 of its potential returns per unit of risk. Catcha Investment Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,003 in Catcha Investment Corp on August 23, 2024 and sell it today you would lose (113.00) from holding Catcha Investment Corp or give up 11.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.75% |
| Values | Daily Returns |
A SPAC II vs. Catcha Investment Corp
Performance |
| Timeline |
| A SPAC II |
| Catcha Investment Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
A SPAC and Catcha Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A SPAC and Catcha Investment
The main advantage of trading using opposite A SPAC and Catcha Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A SPAC position performs unexpectedly, Catcha Investment 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 Catcha Investment will offset losses from the drop in Catcha Investment's long position.The idea behind A SPAC II and Catcha Investment Corp 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.| Catcha Investment vs. DP Cap Acquisition | Catcha Investment vs. A SPAC II | Catcha Investment vs. Athena Technology Acquisition |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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