Correlation Between Cetus Capital and Global Blockchain

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

Diversification Opportunities for Cetus Capital and Global Blockchain

0.22

Correlation Coefficient

Cetus Capital  Global Blockchain

Modest diversification

The 3 months correlation between Cetus and Global is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cetus Capital Acquisition and Global Blockchain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blockchain 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 Global Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blockchain has no effect on the direction of Cetus Capital i.e., Cetus Capital and Global Blockchain go up and down completely randomly.

Pair Corralation between Cetus Capital and Global Blockchain

Given the investment horizon of 90 days Cetus Capital Acquisition is expected to generate 52.04 times more return on investment than Global Blockchain. However, Cetus Capital is 52.04 times more volatile than Global Blockchain Acquisition. It trades about 0.09 of its potential returns per unit of risk. Global Blockchain Acquisition is currently generating about 0.02 per unit of risk. If you would invest  1,052  in Cetus Capital Acquisition on October 12, 2024 and sell it today you would earn a total of  89.00  from holding Cetus Capital Acquisition or generate 8.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	40.96%
Values	Daily Returns

Cetus Capital Acquisition  vs.  Global Blockchain Acquisition

Cetus Capital Acquisition

Risk-Adjusted Performance

0 of 100

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

Global Blockchain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Blockchain Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Global Blockchain is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cetus Capital and Global Blockchain

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

The idea behind Cetus Capital Acquisition and Global Blockchain Acquisition 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.