Correlation Between Cepton and Anghami Warrants

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

By analyzing existing cross correlation between Cepton Inc and Anghami Warrants, you can compare the effects of market volatilities on Cepton and Anghami Warrants 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 Cepton with a short position of Anghami Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Anghami Warrants.

Diversification Opportunities for Cepton and Anghami Warrants

0.25

Correlation Coefficient

Cepton  Anghami Warrants

Modest diversification

The 3 months correlation between Cepton and Anghami is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Anghami Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anghami Warrants and Cepton 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 Cepton Inc are associated (or correlated) with Anghami Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anghami Warrants has no effect on the direction of Cepton i.e., Cepton and Anghami Warrants go up and down completely randomly.

Pair Corralation between Cepton and Anghami Warrants

Given the investment horizon of 90 days Cepton is expected to generate 176.36 times less return on investment than Anghami Warrants. But when comparing it to its historical volatility, Cepton Inc is 34.11 times less risky than Anghami Warrants. It trades about 0.03 of its potential returns per unit of risk. Anghami Warrants is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Anghami Warrants on September 14, 2024 and sell it today you would earn a total of  0.25  from holding Anghami Warrants or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	65.43%
Values	Daily Returns

Cepton Inc  vs.  Anghami Warrants

Cepton Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cepton Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Cepton is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Anghami Warrants

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Anghami Warrants are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical indicators, Anghami Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cepton and Anghami Warrants

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

The idea behind Cepton Inc and Anghami Warrants 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 Anywhere module to track or share privately all of your investments from the convenience of any device.