Correlation Between Carlotz and InFintT Acquisition

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

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

Diversification Opportunities for Carlotz and InFintT Acquisition

-0.87

Correlation Coefficient

Carlotz  InFintT Acquisition

Pay attention - limited upside

The 3 months correlation between Carlotz and InFintT is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Carlotz and InFintT Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InFintT Acquisition Corp and Carlotz 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 Carlotz are associated (or correlated) with InFintT Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InFintT Acquisition Corp has no effect on the direction of Carlotz i.e., Carlotz and InFintT Acquisition go up and down completely randomly.

Pair Corralation between Carlotz and InFintT Acquisition

If you would invest  1,150  in InFintT Acquisition Corp on February 26, 2024 and sell it today you would earn a total of  9.00  from holding InFintT Acquisition Corp or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Carlotz  vs.  InFintT Acquisition Corp

Carlotz

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlotz has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Carlotz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

InFintT Acquisition Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InFintT Acquisition Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, InFintT Acquisition is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlotz and InFintT Acquisition

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

The idea behind Carlotz and InFintT Acquisition 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.