Correlation Between Cepton and Wag Group
Can any of the company-specific risk be diversified away by investing in both Cepton and Wag Group 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 Cepton and Wag Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Wag Group Co, you can compare the effects of market volatilities on Cepton and Wag Group 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 Cepton with a short position of Wag Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Wag Group.
Diversification Opportunities for Cepton and Wag Group
Very good diversification
The 3 months correlation between Cepton and Wag is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Wag Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wag Group and Cepton 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 Cepton Inc are associated (or correlated) with Wag Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wag Group has no effect on the direction of Cepton i.e., Cepton and Wag Group go up and down completely randomly.
Pair Corralation between Cepton and Wag Group
Assuming the 90 days horizon Cepton is expected to generate 9.73 times less return on investment than Wag Group. But when comparing it to its historical volatility, Cepton Inc is 5.44 times less risky than Wag Group. It trades about 0.05 of its potential returns per unit of risk. Wag Group Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Wag Group Co on September 3, 2024 and sell it today you would lose (13.40) from holding Wag Group Co or give up 89.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.89% |
| Values | Daily Returns |
Cepton Inc vs. Wag Group Co
Performance |
| Timeline |
| Cepton Inc |
| Wag Group |
Cepton and Wag Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Wag Group
The main advantage of trading using opposite Cepton and Wag Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Wag Group 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 Wag Group will offset losses from the drop in Wag Group's long position.| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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