Correlation Between Cascadia Acquisition and Omnilit Acquisition
Can any of the company-specific risk be diversified away by investing in both Cascadia Acquisition and Omnilit 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 Cascadia Acquisition and Omnilit Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cascadia Acquisition Corp and Omnilit Acquisition Corp, you can compare the effects of market volatilities on Cascadia Acquisition and Omnilit 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 Cascadia Acquisition with a short position of Omnilit Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cascadia Acquisition and Omnilit Acquisition.
Diversification Opportunities for Cascadia Acquisition and Omnilit Acquisition
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cascadia and Omnilit is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cascadia Acquisition Corp and Omnilit Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omnilit Acquisition Corp and Cascadia 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 Cascadia Acquisition Corp are associated (or correlated) with Omnilit Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omnilit Acquisition Corp has no effect on the direction of Cascadia Acquisition i.e., Cascadia Acquisition and Omnilit Acquisition go up and down completely randomly.
Pair Corralation between Cascadia Acquisition and Omnilit Acquisition
Assuming the 90 days horizon Cascadia Acquisition Corp is expected to generate 83.04 times more return on investment than Omnilit Acquisition. However, Cascadia Acquisition is 83.04 times more volatile than Omnilit Acquisition Corp. It trades about 0.19 of its potential returns per unit of risk. Omnilit Acquisition Corp is currently generating about 0.15 per unit of risk. If you would invest 5.00 in Cascadia Acquisition Corp on September 1, 2024 and sell it today you would earn a total of 3.51 from holding Cascadia Acquisition Corp or generate 70.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Cascadia Acquisition Corp vs. Omnilit Acquisition Corp
Performance |
| Timeline |
| Cascadia Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Omnilit Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cascadia Acquisition and Omnilit Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cascadia Acquisition and Omnilit Acquisition
The main advantage of trading using opposite Cascadia Acquisition and Omnilit Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cascadia Acquisition position performs unexpectedly, Omnilit 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 Omnilit Acquisition will offset losses from the drop in Omnilit Acquisition's long position.The idea behind Cascadia Acquisition Corp and Omnilit 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.| Omnilit Acquisition vs. Oak Woods Acquisition | Omnilit Acquisition vs. Insight Acquisition Corp | Omnilit Acquisition vs. ClimateRock Class A | Omnilit Acquisition vs. Insight Acquisition Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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