Correlation Between DUET Acquisition and Cantor Equity

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

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

Diversification Opportunities for DUET Acquisition and Cantor Equity

0.79

Correlation Coefficient

DUET Acquisition  Cantor Equity

Poor diversification

The 3 months correlation between DUET and Cantor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding DUET Acquisition Corp 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 DUET 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 DUET Acquisition Corp 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 DUET Acquisition i.e., DUET Acquisition and Cantor Equity go up and down completely randomly.

Pair Corralation between DUET Acquisition and Cantor Equity

Given the investment horizon of 90 days DUET Acquisition is expected to generate 2.98 times less return on investment than Cantor Equity. But when comparing it to its historical volatility, DUET Acquisition Corp is 1.34 times less risky than Cantor Equity. It trades about 0.07 of its potential returns per unit of risk. Cantor Equity Partners, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,002  in Cantor Equity Partners, on September 2, 2024 and sell it today you would earn a total of  19.00  from holding Cantor Equity Partners, or generate 1.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

DUET Acquisition Corp  vs.  Cantor Equity Partners,

DUET Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DUET Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, DUET Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 DUET Acquisition and Cantor Equity

The main advantage of trading using opposite DUET Acquisition and Cantor Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DUET Acquisition 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 DUET Acquisition Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.