Correlation Between CF Acquisition and Senior Connect
Can any of the company-specific risk be diversified away by investing in both CF Acquisition and Senior Connect 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 Senior Connect into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition IV and Senior Connect Acquisition, you can compare the effects of market volatilities on CF Acquisition and Senior Connect 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 Senior Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and Senior Connect.
Diversification Opportunities for CF Acquisition and Senior Connect
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CFIV and Senior is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition IV and Senior Connect Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senior Connect Acqui 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 IV are associated (or correlated) with Senior Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senior Connect Acqui has no effect on the direction of CF Acquisition i.e., CF Acquisition and Senior Connect go up and down completely randomly.
Pair Corralation between CF Acquisition and Senior Connect
Given the investment horizon of 90 days CF Acquisition IV is expected to generate 0.01 times more return on investment than Senior Connect. However, CF Acquisition IV is 78.62 times less risky than Senior Connect. It trades about 0.1 of its potential returns per unit of risk. Senior Connect Acquisition is currently generating about -0.07 per unit of risk. If you would invest 1,004 in CF Acquisition IV on August 25, 2024 and sell it today you would earn a total of 48.00 from holding CF Acquisition IV or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 54.72% |
| Values | Daily Returns |
CF Acquisition IV vs. Senior Connect Acquisition
Performance |
| Timeline |
| CF Acquisition IV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Senior Connect Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Acquisition and Senior Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and Senior Connect
The main advantage of trading using opposite CF Acquisition and Senior Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition position performs unexpectedly, Senior Connect 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 Senior Connect will offset losses from the drop in Senior Connect's long position.| CF Acquisition vs. Finnovate Acquisition Corp | CF Acquisition vs. IX Acquisition Corp | CF Acquisition vs. LatAmGrowth SPAC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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