Correlation Between Inflection Point and Sachem Capital

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

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

Diversification Opportunities for Inflection Point and Sachem Capital

0.55

Correlation Coefficient

Inflection Point  Sachem Capital

Very weak diversification

The 3 months correlation between Inflection and Sachem is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Inflection Point i.e., Inflection Point and Sachem Capital go up and down completely randomly.

Pair Corralation between Inflection Point and Sachem Capital

Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 12.29 times more return on investment than Sachem Capital. However, Inflection Point is 12.29 times more volatile than Sachem Capital Corp. It trades about 0.06 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.18 per unit of risk. If you would invest  1,053  in Inflection Point Acquisition on October 9, 2024 and sell it today you would earn a total of  260.00  from holding Inflection Point Acquisition or generate 24.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.31%
Values	Daily Returns

Inflection Point Acquisition  vs.  Sachem Capital Corp

Inflection Point Acq

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sachem Capital Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Sachem Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Sachem Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Inflection Point and Sachem Capital

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

The idea behind Inflection Point Acquisition and Sachem Capital 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.