Correlation Between Cartica Acquisition and Atlantic Coastal

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

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

Diversification Opportunities for Cartica Acquisition and Atlantic Coastal

-0.06

Correlation Coefficient

Cartica Acquisition  Atlantic Coastal

Good diversification

The 3 months correlation between Cartica and Atlantic is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cartica Acquisition Corp and Atlantic Coastal Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Coastal Acq and Cartica 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 Cartica Acquisition Corp are associated (or correlated) with Atlantic Coastal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Coastal Acq has no effect on the direction of Cartica Acquisition i.e., Cartica Acquisition and Atlantic Coastal go up and down completely randomly.

Pair Corralation between Cartica Acquisition and Atlantic Coastal

Assuming the 90 days horizon Cartica Acquisition Corp is expected to generate 0.32 times more return on investment than Atlantic Coastal. However, Cartica Acquisition Corp is 3.13 times less risky than Atlantic Coastal. It trades about 0.04 of its potential returns per unit of risk. Atlantic Coastal Acquisition is currently generating about -0.03 per unit of risk. If you would invest  1,080  in Cartica Acquisition Corp on October 6, 2024 and sell it today you would earn a total of  90.00  from holding Cartica Acquisition Corp or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.0%
Values	Daily Returns

Cartica Acquisition Corp  vs.  Atlantic Coastal Acquisition

Cartica Acquisition Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cartica Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Cartica Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Atlantic Coastal Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic Coastal Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cartica Acquisition and Atlantic Coastal

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

The idea behind Cartica Acquisition Corp and Atlantic Coastal 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.