Correlation Between Cactus Acquisition and Finnovate Acquisition

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cactus Acquisition and Finnovate 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 Cactus Acquisition and Finnovate Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cactus Acquisition Corp and Finnovate Acquisition Corp, you can compare the effects of market volatilities on Cactus Acquisition and Finnovate 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 Cactus Acquisition with a short position of Finnovate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cactus Acquisition and Finnovate Acquisition.

Diversification Opportunities for Cactus Acquisition and Finnovate Acquisition

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cactus and Finnovate is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cactus Acquisition Corp and Finnovate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnovate Acquisition and Cactus 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 Cactus Acquisition Corp are associated (or correlated) with Finnovate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnovate Acquisition has no effect on the direction of Cactus Acquisition i.e., Cactus Acquisition and Finnovate Acquisition go up and down completely randomly.

Pair Corralation between Cactus Acquisition and Finnovate Acquisition

Given the investment horizon of 90 days Cactus Acquisition Corp is expected to generate 7.99 times more return on investment than Finnovate Acquisition. However, Cactus Acquisition is 7.99 times more volatile than Finnovate Acquisition Corp. It trades about 0.22 of its potential returns per unit of risk. Finnovate Acquisition Corp is currently generating about 0.22 per unit of risk. If you would invest  1,116  in Cactus Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  23.00  from holding Cactus Acquisition Corp or generate 2.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cactus Acquisition Corp  vs.  Finnovate Acquisition Corp

 Performance 
       Timeline  
Cactus Acquisition Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cactus Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cactus Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Finnovate Acquisition 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Finnovate Acquisition Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Finnovate Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cactus Acquisition and Finnovate Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cactus Acquisition and Finnovate Acquisition

The main advantage of trading using opposite Cactus Acquisition and Finnovate Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cactus Acquisition position performs unexpectedly, Finnovate 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 Finnovate Acquisition will offset losses from the drop in Finnovate Acquisition's long position.
The idea behind Cactus Acquisition Corp and Finnovate 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

Other Complementary Tools

Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios