Correlation Between Fintech Ecosystem and Kairous Acquisition
Can any of the company-specific risk be diversified away by investing in both Fintech Ecosystem and Kairous 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 Fintech Ecosystem and Kairous Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fintech Ecosystem Development and Kairous Acquisition Corp, you can compare the effects of market volatilities on Fintech Ecosystem and Kairous 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 Fintech Ecosystem with a short position of Kairous Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fintech Ecosystem and Kairous Acquisition.
Diversification Opportunities for Fintech Ecosystem and Kairous Acquisition
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fintech and Kairous is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fintech Ecosystem Development and Kairous Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kairous Acquisition Corp and Fintech Ecosystem 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 Fintech Ecosystem Development are associated (or correlated) with Kairous Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kairous Acquisition Corp has no effect on the direction of Fintech Ecosystem i.e., Fintech Ecosystem and Kairous Acquisition go up and down completely randomly.
Pair Corralation between Fintech Ecosystem and Kairous Acquisition
Assuming the 90 days horizon Fintech Ecosystem Development is expected to generate 1.75 times more return on investment than Kairous Acquisition. However, Fintech Ecosystem is 1.75 times more volatile than Kairous Acquisition Corp. It trades about 0.39 of its potential returns per unit of risk. Kairous Acquisition Corp is currently generating about 0.21 per unit of risk. If you would invest 13.00 in Fintech Ecosystem Development on September 1, 2024 and sell it today you would lose (12.62) from holding Fintech Ecosystem Development or give up 97.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 30.26% |
| Values | Daily Returns |
Fintech Ecosystem Development vs. Kairous Acquisition Corp
Performance |
| Timeline |
| Fintech Ecosystem |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kairous Acquisition Corp |
Fintech Ecosystem and Kairous Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fintech Ecosystem and Kairous Acquisition
The main advantage of trading using opposite Fintech Ecosystem and Kairous Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fintech Ecosystem position performs unexpectedly, Kairous 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 Kairous Acquisition will offset losses from the drop in Kairous Acquisition's long position.The idea behind Fintech Ecosystem Development and Kairous 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.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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