Correlation Between L Catterton and Maquia Capital
Can any of the company-specific risk be diversified away by investing in both L Catterton and Maquia Capital 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 Maquia Capital 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 Maquia Capital Acquisition, you can compare the effects of market volatilities on L Catterton and Maquia Capital 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 Maquia Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Catterton and Maquia Capital.
Diversification Opportunities for L Catterton and Maquia Capital
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LCAA and Maquia is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding L Catterton Asia and Maquia Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maquia Capital Acqui 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 Maquia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maquia Capital Acqui has no effect on the direction of L Catterton i.e., L Catterton and Maquia Capital go up and down completely randomly.
Pair Corralation between L Catterton and Maquia Capital
Given the investment horizon of 90 days L Catterton is expected to generate 1.28 times less return on investment than Maquia Capital. But when comparing it to its historical volatility, L Catterton Asia is 7.87 times less risky than Maquia Capital. It trades about 0.15 of its potential returns per unit of risk. Maquia Capital Acquisition is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Maquia Capital Acquisition on November 4, 2024 and sell it today you would earn a total of 85.00 from holding Maquia Capital Acquisition or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 30.27% |
| Values | Daily Returns |
L Catterton Asia vs. Maquia Capital Acquisition
Performance |
| Timeline |
| L Catterton Asia |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Maquia Capital Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
L Catterton and Maquia Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Catterton and Maquia Capital
The main advantage of trading using opposite L Catterton and Maquia Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Catterton position performs unexpectedly, Maquia Capital 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 Maquia Capital will offset losses from the drop in Maquia Capital's long position.The idea behind L Catterton Asia and Maquia Capital Acquisition 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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