Correlation Between Kairous Acquisition and Clover Leaf
Can any of the company-specific risk be diversified away by investing in both Kairous Acquisition and Clover Leaf 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 Kairous Acquisition and Clover Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kairous Acquisition Corp and Clover Leaf Capital, you can compare the effects of market volatilities on Kairous Acquisition and Clover Leaf 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 Kairous Acquisition with a short position of Clover Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kairous Acquisition and Clover Leaf.
Diversification Opportunities for Kairous Acquisition and Clover Leaf
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kairous and Clover is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kairous Acquisition Corp and Clover Leaf Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clover Leaf Capital and Kairous Acquisition 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 Kairous Acquisition Corp are associated (or correlated) with Clover Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clover Leaf Capital has no effect on the direction of Kairous Acquisition i.e., Kairous Acquisition and Clover Leaf go up and down completely randomly.
Pair Corralation between Kairous Acquisition and Clover Leaf
Assuming the 90 days horizon Kairous Acquisition Corp is expected to generate 1.86 times more return on investment than Clover Leaf. However, Kairous Acquisition is 1.86 times more volatile than Clover Leaf Capital. It trades about 0.16 of its potential returns per unit of risk. Clover Leaf Capital is currently generating about 0.1 per unit of risk. If you would invest 15.00 in Kairous Acquisition Corp on September 3, 2024 and sell it today you would lose (7.99) from holding Kairous Acquisition Corp or give up 53.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.47% |
| Values | Daily Returns |
Kairous Acquisition Corp vs. Clover Leaf Capital
Performance |
| Timeline |
| Kairous Acquisition Corp |
| Clover Leaf Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kairous Acquisition and Clover Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kairous Acquisition and Clover Leaf
The main advantage of trading using opposite Kairous Acquisition and Clover Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kairous Acquisition position performs unexpectedly, Clover Leaf 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 Clover Leaf will offset losses from the drop in Clover Leaf's long position.The idea behind Kairous Acquisition Corp and Clover Leaf Capital 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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