Correlation Between Digital World and CNDB Old
Can any of the company-specific risk be diversified away by investing in both Digital World and CNDB Old 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 Digital World and CNDB Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital World Acquisition and CNDB Old, you can compare the effects of market volatilities on Digital World and CNDB Old 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 Digital World with a short position of CNDB Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital World and CNDB Old.
Diversification Opportunities for Digital World and CNDB Old
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digital and CNDB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Digital World Acquisition and CNDB Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNDB Old and Digital World 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 Digital World Acquisition are associated (or correlated) with CNDB Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNDB Old has no effect on the direction of Digital World i.e., Digital World and CNDB Old go up and down completely randomly.
Pair Corralation between Digital World and CNDB Old
If you would invest (100.00) in CNDB Old on December 28, 2024 and sell it today you would earn a total of 100.00 from holding CNDB Old or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Digital World Acquisition vs. CNDB Old
Performance |
Timeline |
Digital World Acquisition |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
CNDB Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Digital World and CNDB Old Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Digital World and CNDB Old
The main advantage of trading using opposite Digital World and CNDB Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital World position performs unexpectedly, CNDB Old 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 CNDB Old will offset losses from the drop in CNDB Old's long position.The idea behind Digital World Acquisition and CNDB Old 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.CNDB Old vs. Marblegate Acquisition Corp | CNDB Old vs. Oak Woods Acquisition | CNDB Old vs. Alpha Star Acquisition | CNDB Old vs. Alpha One |
Check out your portfolio center.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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