Correlation Between Cheer Holding and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Cheer Holding and Software 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 Cheer Holding and Software Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheer Holding and Software Acquisition Group, you can compare the effects of market volatilities on Cheer Holding and Software 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 Cheer Holding with a short position of Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheer Holding and Software Acquisition.
Diversification Opportunities for Cheer Holding and Software Acquisition
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cheer and Software is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cheer Holding and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition and Cheer Holding 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 Cheer Holding are associated (or correlated) with Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Cheer Holding i.e., Cheer Holding and Software Acquisition go up and down completely randomly.
Pair Corralation between Cheer Holding and Software Acquisition
Considering the 90-day investment horizon Cheer Holding is expected to generate 1.5 times less return on investment than Software Acquisition. But when comparing it to its historical volatility, Cheer Holding is 3.75 times less risky than Software Acquisition. It trades about 0.06 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.86 in Software Acquisition Group on April 13, 2025 and sell it today you would lose (0.16) from holding Software Acquisition Group or give up 8.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.38% |
| Values | Daily Returns |
Cheer Holding vs. Software Acquisition Group
Performance |
| Timeline |
| Cheer Holding |
| Software Acquisition |
Cheer Holding and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheer Holding and Software Acquisition
The main advantage of trading using opposite Cheer Holding and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheer Holding position performs unexpectedly, Software 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| Cheer Holding vs. Weyco Group | Cheer Holding vs. ATRenew Inc DRC | Cheer Holding vs. Innovation Beverage Group | Cheer Holding vs. Altria Group |
| Software Acquisition vs. Sphere Entertainment Co | Software Acquisition vs. Kartoon Studios, | Software Acquisition vs. AMCON Distributing | Software Acquisition vs. Sligro Food Group |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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