Correlation Between Roth CH and Churchill Capital
Can any of the company-specific risk be diversified away by investing in both Roth CH 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 Roth CH and Churchill Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roth CH Acquisition and Churchill Capital Corp, you can compare the effects of market volatilities on Roth CH 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 Roth CH with a short position of Churchill Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roth CH and Churchill Capital.
Diversification Opportunities for Roth CH and Churchill Capital
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Roth and Churchill is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Roth CH Acquisition and Churchill Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Capital Corp and Roth CH 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 Roth CH Acquisition 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 Corp has no effect on the direction of Roth CH i.e., Roth CH and Churchill Capital go up and down completely randomly.
Pair Corralation between Roth CH and Churchill Capital
Assuming the 90 days horizon Roth CH Acquisition is expected to generate 6.95 times more return on investment than Churchill Capital. However, Roth CH is 6.95 times more volatile than Churchill Capital Corp. It trades about 0.19 of its potential returns per unit of risk. Churchill Capital Corp is currently generating about 0.01 per unit of risk. If you would invest 20.00 in Roth CH Acquisition on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Roth CH Acquisition or generate 135.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 16.47% |
| Values | Daily Returns |
Roth CH Acquisition vs. Churchill Capital Corp
Performance |
| Timeline |
| Roth CH Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Churchill Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Roth CH and Churchill Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roth CH and Churchill Capital
The main advantage of trading using opposite Roth CH and Churchill Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roth CH 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 Roth CH Acquisition and Churchill Capital 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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