Correlation Between Coastal Capital and Interups

Can any of the company-specific risk be diversified away by investing in both Coastal Capital and Interups 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 Coastal Capital and Interups into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coastal Capital Acq and Interups, you can compare the effects of market volatilities on Coastal Capital and Interups 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 Coastal Capital with a short position of Interups. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Capital and Interups.

Diversification Opportunities for Coastal Capital and Interups

0.0

Correlation Coefficient

Coastal Capital  Interups

Pay attention - limited upside

The 3 months correlation between Coastal and Interups is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Capital Acq and Interups in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interups and Coastal Capital 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 Coastal Capital Acq are associated (or correlated) with Interups. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interups has no effect on the direction of Coastal Capital i.e., Coastal Capital and Interups go up and down completely randomly.

Pair Corralation between Coastal Capital and Interups

If you would invest  0.12  in Coastal Capital Acq on December 5, 2024 and sell it today you would lose (0.03) from holding Coastal Capital Acq or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.6%
Values	Daily Returns

Coastal Capital Acq  vs.  Interups

Coastal Capital Acq

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coastal Capital Acq are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Coastal Capital revealed solid returns over the last few months and may actually be approaching a breakup point.

Interups

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interups has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Interups is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Coastal Capital and Interups

The main advantage of trading using opposite Coastal Capital and Interups positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Capital position performs unexpectedly, Interups 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 Interups will offset losses from the drop in Interups' long position.

The idea behind Coastal Capital Acq and Interups 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.