Correlation Between CF Acquisition and OPY Acquisition
Can any of the company-specific risk be diversified away by investing in both CF Acquisition and OPY 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 CF Acquisition and OPY Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition VII and OPY Acquisition I, you can compare the effects of market volatilities on CF Acquisition and OPY 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 CF Acquisition with a short position of OPY Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and OPY Acquisition.
Diversification Opportunities for CF Acquisition and OPY Acquisition
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CFFS and OPY is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition VII and OPY Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPY Acquisition I and CF 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 CF Acquisition VII are associated (or correlated) with OPY Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPY Acquisition I has no effect on the direction of CF Acquisition i.e., CF Acquisition and OPY Acquisition go up and down completely randomly.
Pair Corralation between CF Acquisition and OPY Acquisition
If you would invest 1,105 in CF Acquisition VII on September 1, 2024 and sell it today you would earn a total of 15.00 from holding CF Acquisition VII or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
CF Acquisition VII vs. OPY Acquisition I
Performance |
| Timeline |
| CF Acquisition VII |
| OPY Acquisition I |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Acquisition and OPY Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and OPY Acquisition
The main advantage of trading using opposite CF Acquisition and OPY Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition position performs unexpectedly, OPY 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 OPY Acquisition will offset losses from the drop in OPY Acquisition's long position.The idea behind CF Acquisition VII and OPY Acquisition I 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.Check out your portfolio center.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.
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