Correlation Between Breeze Holdings and Chavant Capital

Can any of the company-specific risk be diversified away by investing in both Breeze Holdings and Chavant 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 Breeze Holdings and Chavant Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Breeze Holdings Acquisition and Chavant Capital Acquisition, you can compare the effects of market volatilities on Breeze Holdings and Chavant 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 Breeze Holdings with a short position of Chavant Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Breeze Holdings and Chavant Capital.

Diversification Opportunities for Breeze Holdings and Chavant Capital

0.21

Correlation Coefficient

Breeze Holdings  Chavant Capital

Modest diversification

The 3 months correlation between Breeze and Chavant is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Breeze Holdings Acquisition and Chavant Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chavant Capital Acqu and Breeze Holdings 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 Breeze Holdings Acquisition are associated (or correlated) with Chavant Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chavant Capital Acqu has no effect on the direction of Breeze Holdings i.e., Breeze Holdings and Chavant Capital go up and down completely randomly.

Pair Corralation between Breeze Holdings and Chavant Capital

Assuming the 90 days horizon Breeze Holdings Acquisition is expected to generate 1.06 times more return on investment than Chavant Capital. However, Breeze Holdings is 1.06 times more volatile than Chavant Capital Acquisition. It trades about 0.06 of its potential returns per unit of risk. Chavant Capital Acquisition is currently generating about -0.01 per unit of risk. If you would invest  15.00  in Breeze Holdings Acquisition on October 26, 2024 and sell it today you would lose (4.00) from holding Breeze Holdings Acquisition or give up 26.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	62.28%
Values	Daily Returns

Breeze Holdings Acquisition  vs.  Chavant Capital Acquisition

Breeze Holdings Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Breeze Holdings Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Breeze Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Chavant Capital Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chavant Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Chavant Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Breeze Holdings and Chavant Capital

The main advantage of trading using opposite Breeze Holdings and Chavant Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Breeze Holdings position performs unexpectedly, Chavant 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 Chavant Capital will offset losses from the drop in Chavant Capital's long position.

The idea behind Breeze Holdings Acquisition and Chavant Capital Acquisition 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.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.