Correlation Between Cactus Acquisition and Hinto Energy
Can any of the company-specific risk be diversified away by investing in both Cactus Acquisition and Hinto Energy 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 Cactus Acquisition and Hinto Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cactus Acquisition Corp and Hinto Energy, you can compare the effects of market volatilities on Cactus Acquisition and Hinto Energy 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 Cactus Acquisition with a short position of Hinto Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cactus Acquisition and Hinto Energy.
Diversification Opportunities for Cactus Acquisition and Hinto Energy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cactus and Hinto is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cactus Acquisition Corp and Hinto Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hinto Energy and Cactus 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 Cactus Acquisition Corp are associated (or correlated) with Hinto Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hinto Energy has no effect on the direction of Cactus Acquisition i.e., Cactus Acquisition and Hinto Energy go up and down completely randomly.
Pair Corralation between Cactus Acquisition and Hinto Energy
Given the investment horizon of 90 days Cactus Acquisition Corp is expected to generate 0.26 times more return on investment than Hinto Energy. However, Cactus Acquisition Corp is 3.89 times less risky than Hinto Energy. It trades about 0.01 of its potential returns per unit of risk. Hinto Energy is currently generating about -0.11 per unit of risk. If you would invest 1,143 in Cactus Acquisition Corp on August 28, 2024 and sell it today you would lose (4.00) from holding Cactus Acquisition Corp or give up 0.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Cactus Acquisition Corp vs. Hinto Energy
Performance |
| Timeline |
| Cactus Acquisition Corp |
| Hinto Energy |
Cactus Acquisition and Hinto Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cactus Acquisition and Hinto Energy
The main advantage of trading using opposite Cactus Acquisition and Hinto Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cactus Acquisition position performs unexpectedly, Hinto Energy 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 Hinto Energy will offset losses from the drop in Hinto Energy's long position.The idea behind Cactus Acquisition Corp and Hinto Energy 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.| Hinto Energy vs. Gores Holdings IX | Hinto Energy vs. International Luxury Products | Hinto Energy vs. Cactus 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |