Correlation Between 10X Capital and Prospector Capital

Can any of the company-specific risk be diversified away by investing in both 10X Capital and Prospector 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 10X Capital and Prospector Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 10X Capital Venture and Prospector Capital Corp, you can compare the effects of market volatilities on 10X Capital and Prospector 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 10X Capital with a short position of Prospector Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of 10X Capital and Prospector Capital.

Diversification Opportunities for 10X Capital and Prospector Capital

0.18

Correlation Coefficient

10X Capital  Prospector Capital

Average diversification

The 3 months correlation between 10X and Prospector is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding 10X Capital Venture and Prospector Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospector Capital Corp and 10X Capital 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 10X Capital Venture are associated (or correlated) with Prospector Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospector Capital Corp has no effect on the direction of 10X Capital i.e., 10X Capital and Prospector Capital go up and down completely randomly.

Pair Corralation between 10X Capital and Prospector Capital

Assuming the 90 days horizon 10X Capital is expected to generate 1.94 times less return on investment than Prospector Capital. In addition to that, 10X Capital is 1.07 times more volatile than Prospector Capital Corp. It trades about 0.04 of its total potential returns per unit of risk. Prospector Capital Corp is currently generating about 0.08 per unit of volatility. If you would invest  1,041  in Prospector Capital Corp on September 1, 2024 and sell it today you would earn a total of  15.00  from holding Prospector Capital Corp or generate 1.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

10X Capital Venture  vs.  Prospector Capital Corp

10X Capital Venture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 10X Capital Venture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, 10X Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Prospector Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prospector Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Prospector Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with 10X Capital and Prospector Capital

The main advantage of trading using opposite 10X Capital and Prospector Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 10X Capital position performs unexpectedly, Prospector 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 Prospector Capital will offset losses from the drop in Prospector Capital's long position.

The idea behind 10X Capital Venture and Prospector Capital 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.