Correlation Between Cars and Accretion Acquisition
Can any of the company-specific risk be diversified away by investing in both Cars and Accretion Acquisition 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 Cars and Accretion Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Accretion Acquisition Corp, you can compare the effects of market volatilities on Cars and Accretion Acquisition 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 Cars with a short position of Accretion Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Accretion Acquisition.
Diversification Opportunities for Cars and Accretion Acquisition
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cars and Accretion is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Accretion Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accretion Acquisition and Cars 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 Cars Inc are associated (or correlated) with Accretion Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accretion Acquisition has no effect on the direction of Cars i.e., Cars and Accretion Acquisition go up and down completely randomly.
Pair Corralation between Cars and Accretion Acquisition
If you would invest 1,588 in Cars Inc on September 4, 2024 and sell it today you would earn a total of 407.00 from holding Cars Inc or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Cars Inc vs. Accretion Acquisition Corp
Performance |
| Timeline |
| Cars Inc |
| Accretion Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cars and Accretion Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Accretion Acquisition
The main advantage of trading using opposite Cars and Accretion Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars position performs unexpectedly, Accretion Acquisition 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 Accretion Acquisition will offset losses from the drop in Accretion Acquisition's long position.The idea behind Cars Inc and Accretion Acquisition 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.| Accretion Acquisition vs. Braskem SA Class | Accretion Acquisition vs. Chiba Bank Ltd | Accretion Acquisition vs. Glacier Bancorp | Accretion Acquisition vs. Hawkins |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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