Correlation Between CHKEL Old and Tastemaker Acquisition

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

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

Diversification Opportunities for CHKEL Old and Tastemaker Acquisition

0.79

Correlation Coefficient

CHKEL Old  Tastemaker Acquisition

Poor diversification

The 3 months correlation between CHKEL and Tastemaker is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CHKEL Old and Tastemaker Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tastemaker Acquisition and CHKEL Old 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 CHKEL Old are associated (or correlated) with Tastemaker Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tastemaker Acquisition has no effect on the direction of CHKEL Old i.e., CHKEL Old and Tastemaker Acquisition go up and down completely randomly.

Pair Corralation between CHKEL Old and Tastemaker Acquisition

If you would invest  6.20  in Tastemaker Acquisition Corp on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Tastemaker Acquisition Corp or generate 0.0% return on investment over 90 days.

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

CHKEL Old  vs.  Tastemaker Acquisition Corp

CHKEL Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, CHKEL Old is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Tastemaker Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tastemaker Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tastemaker Acquisition 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 CHKEL Old and Tastemaker Acquisition

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

The idea behind CHKEL Old and Tastemaker 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.