Correlation Between Screaming Eagle and CC Neuberger
Can any of the company-specific risk be diversified away by investing in both Screaming Eagle and CC Neuberger 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 Screaming Eagle and CC Neuberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Screaming Eagle Acquisition and CC Neuberger Principal, you can compare the effects of market volatilities on Screaming Eagle and CC Neuberger 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 Screaming Eagle with a short position of CC Neuberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Screaming Eagle and CC Neuberger.
Diversification Opportunities for Screaming Eagle and CC Neuberger
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Screaming and PRPC is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Screaming Eagle Acquisition and CC Neuberger Principal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CC Neuberger Principal and Screaming Eagle 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 Screaming Eagle Acquisition are associated (or correlated) with CC Neuberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CC Neuberger Principal has no effect on the direction of Screaming Eagle i.e., Screaming Eagle and CC Neuberger go up and down completely randomly.
Pair Corralation between Screaming Eagle and CC Neuberger
Given the investment horizon of 90 days Screaming Eagle is expected to generate 3.58 times less return on investment than CC Neuberger. But when comparing it to its historical volatility, Screaming Eagle Acquisition is 2.08 times less risky than CC Neuberger. It trades about 0.15 of its potential returns per unit of risk. CC Neuberger Principal is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,039 in CC Neuberger Principal on August 26, 2024 and sell it today you would earn a total of 49.00 from holding CC Neuberger Principal or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.21% |
| Values | Daily Returns |
Screaming Eagle Acquisition vs. CC Neuberger Principal
Performance |
| Timeline |
| Screaming Eagle Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CC Neuberger Principal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Screaming Eagle and CC Neuberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Screaming Eagle and CC Neuberger
The main advantage of trading using opposite Screaming Eagle and CC Neuberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Screaming Eagle position performs unexpectedly, CC Neuberger 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 CC Neuberger will offset losses from the drop in CC Neuberger's long position.The idea behind Screaming Eagle Acquisition and CC Neuberger Principal 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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