Correlation Between DP Cap and Cantor Equity

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

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

Diversification Opportunities for DP Cap and Cantor Equity

0.8

Correlation Coefficient

DP Cap  Cantor Equity

Very poor diversification

The 3 months correlation between DPCS and Cantor is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DP Cap Acquisition and Cantor Equity Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantor Equity Partners, and DP Cap 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 DP Cap Acquisition are associated (or correlated) with Cantor Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantor Equity Partners, has no effect on the direction of DP Cap i.e., DP Cap and Cantor Equity go up and down completely randomly.

Pair Corralation between DP Cap and Cantor Equity

Given the investment horizon of 90 days DP Cap Acquisition is expected to generate 14.83 times more return on investment than Cantor Equity. However, DP Cap is 14.83 times more volatile than Cantor Equity Partners,. It trades about 0.17 of its potential returns per unit of risk. Cantor Equity Partners, is currently generating about 0.28 per unit of risk. If you would invest  1,154  in DP Cap Acquisition on September 2, 2024 and sell it today you would earn a total of  106.00  from holding DP Cap Acquisition or generate 9.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	71.43%
Values	Daily Returns

DP Cap Acquisition  vs.  Cantor Equity Partners,

DP Cap Acquisition

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days DP Cap Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak fundamental indicators, DP Cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cantor Equity Partners,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cantor Equity Partners, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Cantor Equity is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with DP Cap and Cantor Equity

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

The idea behind DP Cap Acquisition and Cantor Equity Partners, 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.