Correlation Between Cactus Acquisition and Jupiter Acquisition

Can any of the company-specific risk be diversified away by investing in both Cactus Acquisition and Jupiter 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 Jupiter 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 Jupiter Acquisition Corp, you can compare the effects of market volatilities on Cactus Acquisition and Jupiter 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 Jupiter Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cactus Acquisition and Jupiter Acquisition.

Diversification Opportunities for Cactus Acquisition and Jupiter Acquisition

0.0

Correlation Coefficient

Cactus Acquisition  Jupiter Acquisition

Pay attention - limited upside

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

Pair Corralation between Cactus Acquisition and Jupiter Acquisition

If you would invest  1,106  in Cactus Acquisition Corp on December 26, 2024 and sell it today you would earn a total of  203.00  from holding Cactus Acquisition Corp or generate 18.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cactus Acquisition Corp  vs.  Jupiter Acquisition Corp

Cactus Acquisition Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cactus Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cactus Acquisition unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jupiter Acquisition Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cactus Acquisition and Jupiter Acquisition

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

The idea behind Cactus Acquisition Corp and Jupiter 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.