Correlation Between Cartica Acquisition and Consilium Acquisition

Can any of the company-specific risk be diversified away by investing in both Cartica Acquisition and Consilium 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 Cartica Acquisition and Consilium Acquisition 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 Consilium Acquisition I, you can compare the effects of market volatilities on Cartica Acquisition and Consilium 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 Cartica Acquisition with a short position of Consilium Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartica Acquisition and Consilium Acquisition.

Diversification Opportunities for Cartica Acquisition and Consilium Acquisition

0.0

Correlation Coefficient

Cartica Acquisition  Consilium Acquisition

Pay attention - limited upside

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

Pair Corralation between Cartica Acquisition and Consilium Acquisition

Assuming the 90 days horizon Cartica Acquisition is expected to generate 1.2 times less return on investment than Consilium Acquisition. But when comparing it to its historical volatility, Cartica Acquisition Corp is 1.62 times less risky than Consilium Acquisition. It trades about 0.04 of its potential returns per unit of risk. Consilium Acquisition I is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,072  in Consilium Acquisition I on October 6, 2024 and sell it today you would earn a total of  97.00  from holding Consilium Acquisition I or generate 9.05% return on investment over 90 days.

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

Cartica Acquisition Corp  vs.  Consilium Acquisition I

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.

Consilium Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cartica Acquisition and Consilium Acquisition

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

The idea behind Cartica Acquisition Corp and Consilium Acquisition I 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.