Correlation Between Cartesian Growth and Kairous Acquisition
Can any of the company-specific risk be diversified away by investing in both Cartesian Growth and Kairous 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 Kairous 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 Kairous Acquisition Corp, you can compare the effects of market volatilities on Cartesian Growth and Kairous 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 Kairous Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartesian Growth and Kairous Acquisition.
Diversification Opportunities for Cartesian Growth and Kairous Acquisition
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cartesian and Kairous is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cartesian Growth and Kairous Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kairous 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 Kairous Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kairous Acquisition Corp has no effect on the direction of Cartesian Growth i.e., Cartesian Growth and Kairous Acquisition go up and down completely randomly.
Pair Corralation between Cartesian Growth and Kairous Acquisition
Assuming the 90 days horizon Cartesian Growth is expected to under-perform the Kairous Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Cartesian Growth is 1.15 times less risky than Kairous Acquisition. The stock trades about -0.17 of its potential returns per unit of risk. The Kairous Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.01 in Kairous Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Kairous Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.55% |
| Values | Daily Returns |
Cartesian Growth vs. Kairous Acquisition Corp
Performance |
| Timeline |
| Cartesian Growth |
| Kairous Acquisition Corp |
Cartesian Growth and Kairous Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cartesian Growth and Kairous Acquisition
The main advantage of trading using opposite Cartesian Growth and Kairous Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cartesian Growth position performs unexpectedly, Kairous 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 Kairous Acquisition will offset losses from the drop in Kairous Acquisition's long position.The idea behind Cartesian Growth and Kairous 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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