Correlation Between Churchill Capital and Elliott Opportunity

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

By analyzing existing cross correlation between Churchill Capital VI and Elliott Opportunity II, you can compare the effects of market volatilities on Churchill Capital and Elliott Opportunity 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 Elliott Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Churchill Capital and Elliott Opportunity.

Diversification Opportunities for Churchill Capital and Elliott Opportunity

0.0

Correlation Coefficient

Churchill Capital  Elliott Opportunity

Pay attention - limited upside

The 3 months correlation between Churchill and Elliott is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Churchill Capital VI and Elliott Opportunity II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elliott Opportunity 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 VI are associated (or correlated) with Elliott Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elliott Opportunity has no effect on the direction of Churchill Capital i.e., Churchill Capital and Elliott Opportunity go up and down completely randomly.

Pair Corralation between Churchill Capital and Elliott Opportunity

If you would invest (100.00) in Elliott Opportunity II on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Elliott Opportunity II or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Churchill Capital VI  vs.  Elliott Opportunity II

Churchill Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Churchill Capital VI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Churchill Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Elliott Opportunity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elliott Opportunity II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Elliott Opportunity 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 Churchill Capital and Elliott Opportunity

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

The idea behind Churchill Capital VI and Elliott Opportunity II 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.