Correlation Between Western Acquisition and Cartica Acquisition
Can any of the company-specific risk be diversified away by investing in both Western Acquisition and Cartica 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 Western Acquisition and Cartica Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Acquisition Ventures and Cartica Acquisition Corp, you can compare the effects of market volatilities on Western Acquisition and Cartica 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 Western Acquisition with a short position of Cartica Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Cartica Acquisition.
Diversification Opportunities for Western Acquisition and Cartica Acquisition
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Cartica is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Western Acquisition Ventures and Cartica Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartica Acquisition Corp and Western 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 Western Acquisition Ventures are associated (or correlated) with Cartica Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartica Acquisition Corp has no effect on the direction of Western Acquisition i.e., Western Acquisition and Cartica Acquisition go up and down completely randomly.
Pair Corralation between Western Acquisition and Cartica Acquisition
Assuming the 90 days horizon Western Acquisition Ventures is expected to generate 1.73 times more return on investment than Cartica Acquisition. However, Western Acquisition is 1.73 times more volatile than Cartica Acquisition Corp. It trades about 0.25 of its potential returns per unit of risk. Cartica Acquisition Corp is currently generating about -0.29 per unit of risk. If you would invest 1,154 in Western Acquisition Ventures on November 3, 2024 and sell it today you would earn a total of 186.00 from holding Western Acquisition Ventures or generate 16.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.16% |
| Values | Daily Returns |
Western Acquisition Ventures vs. Cartica Acquisition Corp
Performance |
| Timeline |
| Western Acquisition |
| Cartica Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Acquisition and Cartica Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Acquisition and Cartica Acquisition
The main advantage of trading using opposite Western Acquisition and Cartica Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Acquisition position performs unexpectedly, Cartica 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 Cartica Acquisition will offset losses from the drop in Cartica Acquisition's long position.| Western Acquisition vs. Portillos | Western Acquisition vs. Emerson Electric | Western Acquisition vs. Starbucks | Western Acquisition vs. Oasis Hotel Resort |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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