Correlation Between Churchill Capital and Berenson Acquisition
Can any of the company-specific risk be diversified away by investing in both Churchill Capital and Berenson 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 Churchill Capital and Berenson Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Churchill Capital Corp and Berenson Acquisition Corp, you can compare the effects of market volatilities on Churchill Capital and Berenson 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 Churchill Capital with a short position of Berenson Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Churchill Capital and Berenson Acquisition.
Diversification Opportunities for Churchill Capital and Berenson Acquisition
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Churchill and Berenson is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Capital Corp and Berenson Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berenson Acquisition Corp and Churchill Capital 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 Churchill Capital Corp are associated (or correlated) with Berenson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berenson Acquisition Corp has no effect on the direction of Churchill Capital i.e., Churchill Capital and Berenson Acquisition go up and down completely randomly.
Pair Corralation between Churchill Capital and Berenson Acquisition
If you would invest 1,064 in Berenson Acquisition Corp on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Berenson Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Churchill Capital Corp vs. Berenson Acquisition Corp
Performance |
| Timeline |
| Churchill Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Berenson Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Churchill Capital and Berenson Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Churchill Capital and Berenson Acquisition
The main advantage of trading using opposite Churchill Capital and Berenson Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Churchill Capital position performs unexpectedly, Berenson 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 Berenson Acquisition will offset losses from the drop in Berenson Acquisition's long position.The idea behind Churchill Capital Corp and Berenson 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.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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