Correlation Between Cartesian Growth and NOVA VISION

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

By analyzing existing cross correlation between Cartesian Growth and NOVA VISION ACQUISITION, you can compare the effects of market volatilities on Cartesian Growth and NOVA VISION 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 Cartesian Growth with a short position of NOVA VISION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cartesian Growth and NOVA VISION.

Diversification Opportunities for Cartesian Growth and NOVA VISION

-0.62

Correlation Coefficient

Cartesian Growth  NOVA VISION

Excellent diversification

The 3 months correlation between Cartesian and NOVA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cartesian Growth and NOVA VISION ACQUISITION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVA VISION ACQUISITION and Cartesian Growth 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 Cartesian Growth are associated (or correlated) with NOVA VISION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVA VISION ACQUISITION has no effect on the direction of Cartesian Growth i.e., Cartesian Growth and NOVA VISION go up and down completely randomly.

Pair Corralation between Cartesian Growth and NOVA VISION

Assuming the 90 days horizon Cartesian Growth is expected to under-perform the NOVA VISION. But the stock apears to be less risky and, when comparing its historical volatility, Cartesian Growth is 9.27 times less risky than NOVA VISION. The stock trades about -0.03 of its potential returns per unit of risk. The NOVA VISION ACQUISITION is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,059  in NOVA VISION ACQUISITION on October 10, 2024 and sell it today you would earn a total of  2,641  from holding NOVA VISION ACQUISITION or generate 249.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.95%
Values	Daily Returns

Cartesian Growth  vs.  NOVA VISION ACQUISITION

Cartesian Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cartesian Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

NOVA VISION ACQUISITION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOVA VISION ACQUISITION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, NOVA VISION is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Cartesian Growth and NOVA VISION

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

The idea behind Cartesian Growth and NOVA VISION 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.