Correlation Between Sound Point and CC Neuberger
Can any of the company-specific risk be diversified away by investing in both Sound Point 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 Sound Point and CC Neuberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sound Point Acquisition and CC Neuberger Principal, you can compare the effects of market volatilities on Sound Point 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 Sound Point with a short position of CC Neuberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sound Point and CC Neuberger.
Diversification Opportunities for Sound Point and CC Neuberger
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sound and PRPC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sound Point 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 Sound Point 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 Sound Point 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 Sound Point i.e., Sound Point and CC Neuberger go up and down completely randomly.
Pair Corralation between Sound Point and CC Neuberger
Assuming the 90 days horizon Sound Point is expected to generate 1.92 times less return on investment than CC Neuberger. In addition to that, Sound Point is 2.59 times more volatile than CC Neuberger Principal. It trades about 0.04 of its total potential returns per unit of risk. CC Neuberger Principal is currently generating about 0.22 per unit of volatility. If you would invest 1,006 in CC Neuberger Principal on August 26, 2024 and sell it today you would earn a total of 82.00 from holding CC Neuberger Principal or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.76% |
| Values | Daily Returns |
Sound Point Acquisition vs. CC Neuberger Principal
Performance |
| Timeline |
| Sound Point Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CC Neuberger Principal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sound Point and CC Neuberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sound Point and CC Neuberger
The main advantage of trading using opposite Sound Point and CC Neuberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sound Point 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.| Sound Point vs. Patria Latin American | Sound Point vs. Rf Acquisition Corp | Sound Point vs. Valuence Merger 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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