Correlation Between Catcha Investment and Constellation Acquisition
Can any of the company-specific risk be diversified away by investing in both Catcha Investment and Constellation 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 Catcha Investment and Constellation Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catcha Investment Corp and Constellation Acquisition Corp, you can compare the effects of market volatilities on Catcha Investment and Constellation 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 Catcha Investment with a short position of Constellation Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catcha Investment and Constellation Acquisition.
Diversification Opportunities for Catcha Investment and Constellation Acquisition
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Catcha and Constellation is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Catcha Investment Corp and Constellation Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Acquisition and Catcha Investment 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 Catcha Investment Corp are associated (or correlated) with Constellation Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Acquisition has no effect on the direction of Catcha Investment i.e., Catcha Investment and Constellation Acquisition go up and down completely randomly.
Pair Corralation between Catcha Investment and Constellation Acquisition
Given the investment horizon of 90 days Catcha Investment is expected to generate 1.09 times less return on investment than Constellation Acquisition. In addition to that, Catcha Investment is 14.33 times more volatile than Constellation Acquisition Corp. It trades about 0.01 of its total potential returns per unit of risk. Constellation Acquisition Corp is currently generating about 0.15 per unit of volatility. If you would invest 1,006 in Constellation Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 66.00 from holding Constellation Acquisition Corp or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 45.67% |
| Values | Daily Returns |
Catcha Investment Corp vs. Constellation Acquisition Corp
Performance |
| Timeline |
| Catcha Investment Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Constellation Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Catcha Investment and Constellation Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catcha Investment and Constellation Acquisition
The main advantage of trading using opposite Catcha Investment and Constellation Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catcha Investment position performs unexpectedly, Constellation 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 Constellation Acquisition will offset losses from the drop in Constellation Acquisition's long position.The idea behind Catcha Investment Corp and Constellation 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.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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