Correlation Between Global Blockchain and L Catterton
Can any of the company-specific risk be diversified away by investing in both Global Blockchain and L Catterton 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 Global Blockchain and L Catterton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Blockchain Acquisition and L Catterton Asia, you can compare the effects of market volatilities on Global Blockchain and L Catterton 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 Global Blockchain with a short position of L Catterton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Blockchain and L Catterton.
Diversification Opportunities for Global Blockchain and L Catterton
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and LCAA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Global Blockchain Acquisition and L Catterton Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Catterton Asia and Global Blockchain 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 Global Blockchain Acquisition are associated (or correlated) with L Catterton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Catterton Asia has no effect on the direction of Global Blockchain i.e., Global Blockchain and L Catterton go up and down completely randomly.
Pair Corralation between Global Blockchain and L Catterton
Given the investment horizon of 90 days Global Blockchain is expected to generate 1.11 times less return on investment than L Catterton. In addition to that, Global Blockchain is 2.8 times more volatile than L Catterton Asia. It trades about 0.04 of its total potential returns per unit of risk. L Catterton Asia is currently generating about 0.14 per unit of volatility. If you would invest 1,005 in L Catterton Asia on September 4, 2024 and sell it today you would earn a total of 45.00 from holding L Catterton Asia or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 30.77% |
| Values | Daily Returns |
Global Blockchain Acquisition vs. L Catterton Asia
Performance |
| Timeline |
| Global Blockchain |
| L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Blockchain and L Catterton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Blockchain and L Catterton
The main advantage of trading using opposite Global Blockchain and L Catterton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Blockchain position performs unexpectedly, L Catterton 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 L Catterton will offset losses from the drop in L Catterton's long position.| Global Blockchain vs. Embrace Change Acquisition | Global Blockchain vs. Bannix Acquisition Corp | Global Blockchain vs. TransAKT | Global Blockchain vs. China Health Management |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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