Correlation Between Chia and CF Acquisition
Can any of the company-specific risk be diversified away by investing in both Chia and CF 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 Chia and CF Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and CF Acquisition Corp, you can compare the effects of market volatilities on Chia and CF 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 Chia with a short position of CF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and CF Acquisition.
Diversification Opportunities for Chia and CF Acquisition
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chia and CFIVU is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Chia and CF Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Acquisition Corp and Chia 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 Chia are associated (or correlated) with CF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Acquisition Corp has no effect on the direction of Chia i.e., Chia and CF Acquisition go up and down completely randomly.
Pair Corralation between Chia and CF Acquisition
Assuming the 90 days trading horizon Chia is expected to under-perform the CF Acquisition. In addition to that, Chia is 6.04 times more volatile than CF Acquisition Corp. It trades about -0.02 of its total potential returns per unit of risk. CF Acquisition Corp is currently generating about 0.0 per unit of volatility. If you would invest 1,050 in CF Acquisition Corp on October 21, 2024 and sell it today you would lose (9.00) from holding CF Acquisition Corp or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 40.47% |
| Values | Daily Returns |
Chia vs. CF Acquisition Corp
Performance |
| Timeline |
| Chia |
| CF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chia and CF Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and CF Acquisition
The main advantage of trading using opposite Chia and CF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia position performs unexpectedly, CF 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 CF Acquisition will offset losses from the drop in CF Acquisition's long position.The idea behind Chia and CF 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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