Correlation Between Canna Global and Cactus Acquisition
Can any of the company-specific risk be diversified away by investing in both Canna Global and Cactus 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 Canna Global and Cactus Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canna Global Acquisition and Cactus Acquisition Corp, you can compare the effects of market volatilities on Canna Global and Cactus 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 Canna Global with a short position of Cactus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canna Global and Cactus Acquisition.
Diversification Opportunities for Canna Global and Cactus Acquisition
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canna and Cactus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Canna Global Acquisition and Cactus Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Acquisition Corp and Canna Global 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 Canna Global Acquisition are associated (or correlated) with Cactus Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Acquisition Corp has no effect on the direction of Canna Global i.e., Canna Global and Cactus Acquisition go up and down completely randomly.
Pair Corralation between Canna Global and Cactus Acquisition
Given the investment horizon of 90 days Canna Global Acquisition is expected to generate 1.01 times more return on investment than Cactus Acquisition. However, Canna Global is 1.01 times more volatile than Cactus Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. Cactus Acquisition Corp is currently generating about 0.01 per unit of risk. If you would invest 1,131 in Canna Global Acquisition on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Canna Global Acquisition or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 14.4% |
| Values | Daily Returns |
Canna Global Acquisition vs. Cactus Acquisition Corp
Performance |
| Timeline |
| Canna Global Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cactus Acquisition Corp |
Canna Global and Cactus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canna Global and Cactus Acquisition
The main advantage of trading using opposite Canna Global and Cactus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canna Global position performs unexpectedly, Cactus 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 Cactus Acquisition will offset losses from the drop in Cactus Acquisition's long position.The idea behind Canna Global Acquisition and Cactus 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.| Cactus Acquisition vs. Visa Class A | Cactus Acquisition vs. Diamond Hill Investment | Cactus Acquisition vs. Distoken Acquisition | Cactus Acquisition vs. AllianceBernstein Holding LP |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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