Correlation Between Capital One and Yotta Acquisition

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

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

Diversification Opportunities for Capital One and Yotta Acquisition

-0.56

Correlation Coefficient

Capital One  Yotta Acquisition

Excellent diversification

The 3 months correlation between Capital and Yotta is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and Yotta Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yotta Acquisition Corp and Capital One 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 Capital One Financial are associated (or correlated) with Yotta Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yotta Acquisition Corp has no effect on the direction of Capital One i.e., Capital One and Yotta Acquisition go up and down completely randomly.

Pair Corralation between Capital One and Yotta Acquisition

Considering the 90-day investment horizon Capital One Financial is expected to under-perform the Yotta Acquisition. In addition to that, Capital One is 4.14 times more volatile than Yotta Acquisition Corp. It trades about -0.01 of its total potential returns per unit of risk. Yotta Acquisition Corp is currently generating about 0.22 per unit of volatility. If you would invest  1,119  in Yotta Acquisition Corp on September 16, 2024 and sell it today you would earn a total of  15.00  from holding Yotta Acquisition Corp or generate 1.34% return on investment over 90 days.

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

Capital One Financial  vs.  Yotta Acquisition Corp

Capital One Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Capital One reported solid returns over the last few months and may actually be approaching a breakup point.

Yotta Acquisition Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yotta Acquisition Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Yotta Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Capital One and Yotta Acquisition

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

The idea behind Capital One Financial and Yotta Acquisition 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.