Correlation Between DP Cap and Maquia Capital

Can any of the company-specific risk be diversified away by investing in both DP Cap and Maquia Capital 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 Maquia Capital 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 Maquia Capital Acquisition, you can compare the effects of market volatilities on DP Cap and Maquia Capital 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 Maquia Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of DP Cap and Maquia Capital.

Diversification Opportunities for DP Cap and Maquia Capital

0.66

Correlation Coefficient

DP Cap  Maquia Capital

Poor diversification

The 3 months correlation between DPCS and Maquia is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding DP Cap Acquisition and Maquia Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maquia Capital Acqui 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 Maquia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maquia Capital Acqui has no effect on the direction of DP Cap i.e., DP Cap and Maquia Capital go up and down completely randomly.

Pair Corralation between DP Cap and Maquia Capital

Given the investment horizon of 90 days DP Cap Acquisition is expected to generate 0.63 times more return on investment than Maquia Capital. However, DP Cap Acquisition is 1.58 times less risky than Maquia Capital. It trades about 0.06 of its potential returns per unit of risk. Maquia Capital Acquisition is currently generating about 0.02 per unit of risk. If you would invest  1,040  in DP Cap Acquisition on September 17, 2024 and sell it today you would earn a total of  220.00  from holding DP Cap Acquisition or generate 21.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	82.23%
Values	Daily Returns

DP Cap Acquisition  vs.  Maquia Capital Acquisition

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 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Maquia Capital Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maquia Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Maquia Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DP Cap and Maquia Capital

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

The idea behind DP Cap Acquisition and Maquia Capital 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.