Correlation Between Cartica Acquisition and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Cartica Acquisition and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Cartica Acquisition and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartica Acquisition and Dow Jones.
Diversification Opportunities for Cartica Acquisition and Dow Jones
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cartica and Dow is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cartica Acquisition Corp and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Cartica Acquisition i.e., Cartica Acquisition and Dow Jones go up and down completely randomly.
Pair Corralation between Cartica Acquisition and Dow Jones
Assuming the 90 days horizon Cartica Acquisition Corp is expected to generate 280.19 times more return on investment than Dow Jones. However, Cartica Acquisition is 280.19 times more volatile than Dow Jones Industrial. It trades about 0.2 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 7.19 in Cartica Acquisition Corp on August 31, 2024 and sell it today you would earn a total of 17.81 from holding Cartica Acquisition Corp or generate 247.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 38.77% |
| Values | Daily Returns |
Cartica Acquisition Corp vs. Dow Jones Industrial
Performance |
| Timeline |
Cartica Acquisition and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Cartica Acquisition Corp
Pair trading matchups for Cartica Acquisition
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Cartica Acquisition and Dow Jones
The main advantage of trading using opposite Cartica Acquisition and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartica Acquisition position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Cartica Acquisition vs. PowerUp Acquisition Corp | Cartica Acquisition vs. HUMANA INC | Cartica Acquisition vs. Aquagold International | Cartica Acquisition vs. Barloworld Ltd ADR |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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