Correlation Between YHN Acquisition and Cantor Equity

Can any of the company-specific risk be diversified away by investing in both YHN 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 YHN 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 YHN Acquisition I and Cantor Equity Partners,, you can compare the effects of market volatilities on YHN 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 YHN Acquisition with a short position of Cantor Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of YHN Acquisition and Cantor Equity.

Diversification Opportunities for YHN Acquisition and Cantor Equity

0.65

Correlation Coefficient

YHN Acquisition  Cantor Equity

Poor diversification

The 3 months correlation between YHN and Cantor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding YHN Acquisition I 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 YHN 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 YHN Acquisition I 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 YHN Acquisition i.e., YHN Acquisition and Cantor Equity go up and down completely randomly.

Pair Corralation between YHN Acquisition and Cantor Equity

Assuming the 90 days horizon YHN Acquisition is expected to generate 3.72 times less return on investment than Cantor Equity. In addition to that, YHN Acquisition is 1.5 times more volatile than Cantor Equity Partners,. It trades about 0.04 of its total potential returns per unit of risk. Cantor Equity Partners, is currently generating about 0.2 per unit of volatility. If you would invest  1,001  in Cantor Equity Partners, on September 14, 2024 and sell it today you would earn a total of  49.00  from holding Cantor Equity Partners, or generate 4.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

YHN Acquisition I  vs.  Cantor Equity Partners,

YHN Acquisition I

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YHN Acquisition I are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, YHN Acquisition is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Cantor Equity Partners,

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cantor Equity Partners, are ranked lower than 15 (%) 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 YHN Acquisition and Cantor Equity

The main advantage of trading using opposite YHN Acquisition and Cantor Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YHN 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 YHN Acquisition I 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.