Correlation Between Cartesian Growth and IB Acquisition
Can any of the company-specific risk be diversified away by investing in both Cartesian Growth and IB 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 Cartesian Growth and IB Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cartesian Growth and IB Acquisition Corp, you can compare the effects of market volatilities on Cartesian Growth and IB 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 Cartesian Growth with a short position of IB Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartesian Growth and IB Acquisition.
Diversification Opportunities for Cartesian Growth and IB Acquisition
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cartesian and IBACR is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cartesian Growth and IB Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IB Acquisition Corp and Cartesian Growth 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 Cartesian Growth are associated (or correlated) with IB Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IB Acquisition Corp has no effect on the direction of Cartesian Growth i.e., Cartesian Growth and IB Acquisition go up and down completely randomly.
Pair Corralation between Cartesian Growth and IB Acquisition
Assuming the 90 days horizon Cartesian Growth is expected to generate 26.7 times less return on investment than IB Acquisition. But when comparing it to its historical volatility, Cartesian Growth is 38.95 times less risky than IB Acquisition. It trades about 0.07 of its potential returns per unit of risk. IB Acquisition Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.55 in IB Acquisition Corp on November 3, 2024 and sell it today you would lose (1.80) from holding IB Acquisition Corp or give up 23.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.6% |
| Values | Daily Returns |
Cartesian Growth vs. IB Acquisition Corp
Performance |
| Timeline |
| Cartesian Growth |
| IB Acquisition Corp |
Cartesian Growth and IB Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cartesian Growth and IB Acquisition
The main advantage of trading using opposite Cartesian Growth and IB Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartesian Growth position performs unexpectedly, IB 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 IB Acquisition will offset losses from the drop in IB Acquisition's long position.| Cartesian Growth vs. Investcorp India Acquisition | Cartesian Growth vs. Rf Acquisition Corp | Cartesian Growth vs. Metal Sky Star |
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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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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