Correlation Between International Luxury and Cactus Acquisition
Can any of the company-specific risk be diversified away by investing in both International Luxury 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 International Luxury and Cactus Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Luxury Products and Cactus Acquisition Corp, you can compare the effects of market volatilities on International Luxury 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 International Luxury with a short position of Cactus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Luxury and Cactus Acquisition.
Diversification Opportunities for International Luxury and Cactus Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and Cactus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding International Luxury Products 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 International Luxury 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 International Luxury Products 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 International Luxury i.e., International Luxury and Cactus Acquisition go up and down completely randomly.
Pair Corralation between International Luxury and Cactus Acquisition
If you would invest 1,160 in Cactus Acquisition Corp on August 30, 2024 and sell it today you would lose (21.00) from holding Cactus Acquisition Corp or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Luxury Products vs. Cactus Acquisition Corp
Performance |
| Timeline |
| International Luxury |
| Cactus Acquisition Corp |
International Luxury and Cactus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Luxury and Cactus Acquisition
The main advantage of trading using opposite International Luxury and Cactus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Luxury 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 International Luxury Products 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.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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |