Correlation Between ChargePoint Holdings and Pet Acquisition

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

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

Diversification Opportunities for ChargePoint Holdings and Pet Acquisition

-0.32

Correlation Coefficient

ChargePoint Holdings  Pet Acquisition

Very good diversification

The 3 months correlation between ChargePoint and Pet is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding ChargePoint Holdings and Pet Acquisition LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pet Acquisition LLC and ChargePoint 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 ChargePoint Holdings are associated (or correlated) with Pet Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pet Acquisition LLC has no effect on the direction of ChargePoint Holdings i.e., ChargePoint Holdings and Pet Acquisition go up and down completely randomly.

Pair Corralation between ChargePoint Holdings and Pet Acquisition

Given the investment horizon of 90 days ChargePoint Holdings is expected to under-perform the Pet Acquisition. In addition to that, ChargePoint Holdings is 1.29 times more volatile than Pet Acquisition LLC. It trades about -0.05 of its total potential returns per unit of risk. Pet Acquisition LLC is currently generating about -0.05 per unit of volatility. If you would invest  457.00  in Pet Acquisition LLC on August 30, 2024 and sell it today you would lose (27.00) from holding Pet Acquisition LLC or give up 5.91% of portfolio value over 90 days.

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

ChargePoint Holdings  vs.  Pet Acquisition LLC

ChargePoint Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pet Acquisition LLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pet Acquisition LLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Pet Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChargePoint Holdings and Pet Acquisition

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

The idea behind ChargePoint Holdings and Pet Acquisition LLC 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.