Correlation Between Churchill Capital and LIV Capital

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

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

Diversification Opportunities for Churchill Capital and LIV Capital

0.88

Correlation Coefficient

Churchill Capital  LIV Capital

Very poor diversification

The 3 months correlation between Churchill and LIV is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Capital V and LIV Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIV Capital Acquisition and Churchill Capital 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 Churchill Capital V are associated (or correlated) with LIV Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIV Capital Acquisition has no effect on the direction of Churchill Capital i.e., Churchill Capital and LIV Capital go up and down completely randomly.

Pair Corralation between Churchill Capital and LIV Capital

If you would invest  1,062  in LIV Capital Acquisition on September 30, 2024 and sell it today you would earn a total of  0.00  from holding LIV Capital Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Churchill Capital V  vs.  LIV Capital Acquisition

Churchill Capital

Risk-Adjusted Performance

0 of 100

Very Weak

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

LIV Capital Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIV Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LIV Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Churchill Capital and LIV Capital

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

The idea behind Churchill Capital V and LIV 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.