Correlation Between TLG Acquisition and CC Neuberger

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

By analyzing existing cross correlation between TLG Acquisition One and CC Neuberger Principal, you can compare the effects of market volatilities on TLG Acquisition and CC Neuberger 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 TLG Acquisition with a short position of CC Neuberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of TLG Acquisition and CC Neuberger.

Diversification Opportunities for TLG Acquisition and CC Neuberger

0.18

Correlation Coefficient

TLG Acquisition  CC Neuberger

Average diversification

The 3 months correlation between TLG and PRPC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TLG Acquisition One and CC Neuberger Principal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CC Neuberger Principal and TLG 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 TLG Acquisition One are associated (or correlated) with CC Neuberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CC Neuberger Principal has no effect on the direction of TLG Acquisition i.e., TLG Acquisition and CC Neuberger go up and down completely randomly.

Pair Corralation between TLG Acquisition and CC Neuberger

If you would invest  1,088  in CC Neuberger Principal on September 17, 2024 and sell it today you would earn a total of  0.00  from holding CC Neuberger Principal or generate 0.0% return on investment over 90 days.

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

TLG Acquisition One  vs.  CC Neuberger Principal

TLG Acquisition One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TLG Acquisition One has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, TLG Acquisition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

CC Neuberger Principal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TLG Acquisition and CC Neuberger

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

The idea behind TLG Acquisition One and CC Neuberger Principal 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.