Correlation Between Crescera Capital and Chavant Capital

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

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

Diversification Opportunities for Crescera Capital and Chavant Capital

0.31

Correlation Coefficient

Crescera Capital  Chavant Capital

Weak diversification

The 3 months correlation between Crescera and Chavant is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Crescera Capital Acquisition and Chavant Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chavant Capital Acqu and Crescera 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 Crescera Capital Acquisition are associated (or correlated) with Chavant Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chavant Capital Acqu has no effect on the direction of Crescera Capital i.e., Crescera Capital and Chavant Capital go up and down completely randomly.

Pair Corralation between Crescera Capital and Chavant Capital

Given the investment horizon of 90 days Crescera Capital is expected to generate 2.18 times less return on investment than Chavant Capital. In addition to that, Crescera Capital is 1.72 times more volatile than Chavant Capital Acquisition. It trades about 0.04 of its total potential returns per unit of risk. Chavant Capital Acquisition is currently generating about 0.13 per unit of volatility. If you would invest  1,025  in Chavant Capital Acquisition on October 7, 2024 and sell it today you would earn a total of  169.00  from holding Chavant Capital Acquisition or generate 16.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Crescera Capital Acquisition  vs.  Chavant Capital Acquisition

Crescera Capital Acq

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crescera Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Crescera Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Chavant Capital Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chavant Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Chavant Capital 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 Crescera Capital and Chavant Capital

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

The idea behind Crescera Capital Acquisition and Chavant Capital 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.