Correlation Between Cartica Acquisition and Aurora Technology
Can any of the company-specific risk be diversified away by investing in both Cartica Acquisition and Aurora Technology 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 Cartica Acquisition and Aurora Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cartica Acquisition Corp and Aurora Technology Acquisition, you can compare the effects of market volatilities on Cartica Acquisition and Aurora Technology 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 Cartica Acquisition with a short position of Aurora Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartica Acquisition and Aurora Technology.
Diversification Opportunities for Cartica Acquisition and Aurora Technology
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cartica and Aurora is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cartica Acquisition Corp and Aurora Technology Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Technology and Cartica 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 Cartica Acquisition Corp are associated (or correlated) with Aurora Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Technology has no effect on the direction of Cartica Acquisition i.e., Cartica Acquisition and Aurora Technology go up and down completely randomly.
Pair Corralation between Cartica Acquisition and Aurora Technology
Assuming the 90 days horizon Cartica Acquisition is expected to generate 1.25 times less return on investment than Aurora Technology. In addition to that, Cartica Acquisition is 3.03 times more volatile than Aurora Technology Acquisition. It trades about 0.04 of its total potential returns per unit of risk. Aurora Technology Acquisition is currently generating about 0.15 per unit of volatility. If you would invest 1,015 in Aurora Technology Acquisition on August 30, 2024 and sell it today you would earn a total of 45.00 from holding Aurora Technology Acquisition or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Cartica Acquisition Corp vs. Aurora Technology Acquisition
Performance |
| Timeline |
| Cartica Acquisition Corp |
| Aurora Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cartica Acquisition and Aurora Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cartica Acquisition and Aurora Technology
The main advantage of trading using opposite Cartica Acquisition and Aurora Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartica Acquisition position performs unexpectedly, Aurora Technology 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 Aurora Technology will offset losses from the drop in Aurora Technology's long position.The idea behind Cartica Acquisition Corp and Aurora Technology Acquisition 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.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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