Correlation Between Cartica Acquisition and Signal Hill

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

Diversification Opportunities for Cartica Acquisition and Signal Hill

-0.42

Correlation Coefficient

Cartica Acquisition  Signal Hill

Very good diversification

The 3 months correlation between Cartica and Signal is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cartica Acquisition Corp and Signal Hill Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signal Hill 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 Signal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signal Hill Acquisition has no effect on the direction of Cartica Acquisition i.e., Cartica Acquisition and Signal Hill go up and down completely randomly.

Pair Corralation between Cartica Acquisition and Signal Hill

If you would invest  1,142  in Cartica Acquisition Corp on September 3, 2024 and sell it today you would earn a total of  1.00  from holding Cartica Acquisition Corp or generate 0.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Cartica Acquisition Corp  vs.  Signal Hill Acquisition

Cartica Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cartica Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Signal Hill Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Signal Hill Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Signal Hill 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 Cartica Acquisition and Signal Hill

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

The idea behind Cartica Acquisition Corp and Signal Hill 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.