Correlation Between CF Acquisition and BRKH Old

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

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

Diversification Opportunities for CF Acquisition and BRKH Old

0.0

Correlation Coefficient

CF Acquisition  BRKH Old

Pay attention - limited upside

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

Pair Corralation between CF Acquisition and BRKH Old

If you would invest (100.00) in BRKH Old on December 28, 2024 and sell it today you would earn a total of  100.00  from holding BRKH Old 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

CF Acquisition VII  vs.  BRKH Old

CF Acquisition VII

Risk-Adjusted Performance

Very Weak

Over the last 90 days CF Acquisition VII has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, CF Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

BRKH Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRKH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking signals, BRKH Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with CF Acquisition and BRKH Old

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

The idea behind CF Acquisition VII and BRKH Old 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 Transaction History module to view history of all your transactions and understand their impact on performance.