Correlation Between CF Acquisition and Churchill Capital
Can any of the company-specific risk be diversified away by investing in both CF Acquisition and Churchill 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 CF Acquisition and Churchill Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CF Acquisition Corp and Churchill Capital V, you can compare the effects of market volatilities on CF Acquisition and Churchill 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 CF Acquisition with a short position of Churchill Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CF Acquisition and Churchill Capital.
Diversification Opportunities for CF Acquisition and Churchill Capital
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CFIVW and Churchill is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CF Acquisition Corp and Churchill Capital V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Capital 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 Corp are associated (or correlated) with Churchill Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Capital has no effect on the direction of CF Acquisition i.e., CF Acquisition and Churchill Capital go up and down completely randomly.
Pair Corralation between CF Acquisition and Churchill Capital
Assuming the 90 days horizon CF Acquisition Corp is expected to generate 40.05 times more return on investment than Churchill Capital. However, CF Acquisition is 40.05 times more volatile than Churchill Capital V. It trades about 0.13 of its potential returns per unit of risk. Churchill Capital V is currently generating about 0.12 per unit of risk. If you would invest 6.50 in CF Acquisition Corp on September 4, 2024 and sell it today you would earn a total of 1.50 from holding CF Acquisition Corp or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.67% |
| Values | Daily Returns |
CF Acquisition Corp vs. Churchill Capital V
Performance |
| Timeline |
| CF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Churchill Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CF Acquisition and Churchill Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CF Acquisition and Churchill Capital
The main advantage of trading using opposite CF Acquisition and Churchill Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CF Acquisition position performs unexpectedly, Churchill 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 Churchill Capital will offset losses from the drop in Churchill Capital's long position.The idea behind CF Acquisition Corp and Churchill Capital V 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.| Churchill Capital vs. In Veritas Medical | Churchill Capital vs. TMT Acquisition Corp | Churchill Capital vs. IX Acquisition Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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