Correlation Between Concord Acquisition and Catcha Investment

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

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

Diversification Opportunities for Concord Acquisition and Catcha Investment

-0.08

Correlation Coefficient

Concord Acquisition  Catcha Investment

Good diversification

The 3 months correlation between Concord and Catcha is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Concord Acquisition Corp and Catcha Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catcha Investment Corp and Concord 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 Concord Acquisition Corp are associated (or correlated) with Catcha Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catcha Investment Corp has no effect on the direction of Concord Acquisition i.e., Concord Acquisition and Catcha Investment go up and down completely randomly.

Pair Corralation between Concord Acquisition and Catcha Investment

Given the investment horizon of 90 days Concord Acquisition is expected to generate 2.52 times less return on investment than Catcha Investment. But when comparing it to its historical volatility, Concord Acquisition Corp is 39.7 times less risky than Catcha Investment. It trades about 0.15 of its potential returns per unit of risk. Catcha Investment Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,005  in Catcha Investment Corp on September 2, 2024 and sell it today you would lose (115.00) from holding Catcha Investment Corp or give up 11.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	45.67%
Values	Daily Returns

Concord Acquisition Corp  vs.  Catcha Investment Corp

Concord Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Concord Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Catcha Investment Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catcha Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Catcha Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Concord Acquisition and Catcha Investment

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

The idea behind Concord Acquisition Corp and Catcha Investment Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.