Correlation Between Cetus Capital and Avalon Acquisition

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

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

Diversification Opportunities for Cetus Capital and Avalon Acquisition

0.0

Correlation Coefficient

Cetus Capital  Avalon Acquisition

Pay attention - limited upside

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

Pair Corralation between Cetus Capital and Avalon Acquisition

If you would invest (100.00) in Avalon Acquisition Unit on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Avalon Acquisition Unit or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cetus Capital Acquisition  vs.  Avalon Acquisition Unit

Cetus Capital Acquisition

Risk-Adjusted Performance

Very Weak

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

Avalon Acquisition Unit

Risk-Adjusted Performance

Very Weak

Over the last 90 days Avalon Acquisition Unit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Avalon 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 Cetus Capital and Avalon Acquisition

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

The idea behind Cetus Capital Acquisition and Avalon Acquisition Unit 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.