Correlation Between Cairn Homes and ACG Acquisition
Can any of the company-specific risk be diversified away by investing in both Cairn Homes and ACG 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 Cairn Homes and ACG Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cairn Homes PLC and ACG Acquisition Co, you can compare the effects of market volatilities on Cairn Homes and ACG 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 Cairn Homes with a short position of ACG Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cairn Homes and ACG Acquisition.
Diversification Opportunities for Cairn Homes and ACG Acquisition
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cairn and ACG is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and ACG Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACG Acquisition and Cairn Homes 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 Cairn Homes PLC are associated (or correlated) with ACG Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACG Acquisition has no effect on the direction of Cairn Homes i.e., Cairn Homes and ACG Acquisition go up and down completely randomly.
Pair Corralation between Cairn Homes and ACG Acquisition
If you would invest 17,700 in Cairn Homes PLC on September 13, 2024 and sell it today you would earn a total of 1,220 from holding Cairn Homes PLC or generate 6.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cairn Homes PLC vs. ACG Acquisition Co
Performance |
| Timeline |
| Cairn Homes PLC |
| ACG Acquisition |
Cairn Homes and ACG Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cairn Homes and ACG Acquisition
The main advantage of trading using opposite Cairn Homes and ACG Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cairn Homes position performs unexpectedly, ACG 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 ACG Acquisition will offset losses from the drop in ACG Acquisition's long position.| Cairn Homes vs. Charter Communications Cl | Cairn Homes vs. Norwegian Air Shuttle | Cairn Homes vs. Eastman Chemical Co | Cairn Homes vs. Batm Advanced Communications |
| ACG Acquisition vs. Catalyst Media Group | ACG Acquisition vs. CATLIN GROUP | ACG Acquisition vs. Tamburi Investment Partners | ACG Acquisition vs. Magnora ASA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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