Correlation Between L Catterton and Kingswood Acquisition
Can any of the company-specific risk be diversified away by investing in both L Catterton and Kingswood 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 L Catterton and Kingswood Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Catterton Asia and Kingswood Acquisition Corp, you can compare the effects of market volatilities on L Catterton and Kingswood 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 L Catterton with a short position of Kingswood Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Catterton and Kingswood Acquisition.
Diversification Opportunities for L Catterton and Kingswood Acquisition
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LCAA and Kingswood is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding L Catterton Asia and Kingswood Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingswood Acquisition and L Catterton 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 L Catterton Asia are associated (or correlated) with Kingswood Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingswood Acquisition has no effect on the direction of L Catterton i.e., L Catterton and Kingswood Acquisition go up and down completely randomly.
Pair Corralation between L Catterton and Kingswood Acquisition
If you would invest 1,080 in Kingswood Acquisition Corp on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Kingswood Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Catterton Asia vs. Kingswood Acquisition Corp
Performance |
| Timeline |
| L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kingswood Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
L Catterton and Kingswood Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Catterton and Kingswood Acquisition
The main advantage of trading using opposite L Catterton and Kingswood Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Catterton position performs unexpectedly, Kingswood 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 Kingswood Acquisition will offset losses from the drop in Kingswood Acquisition's long position.The idea behind L Catterton Asia and Kingswood 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.| Kingswood Acquisition vs. Insight Acquisition Corp | Kingswood Acquisition vs. ClimateRock Class A | Kingswood Acquisition vs. Valuence Merger Corp |
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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