Correlation Between Sachem Capital and Black Hawk

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

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

Diversification Opportunities for Sachem Capital and Black Hawk

0.59

Correlation Coefficient

Sachem Capital  Black Hawk

Very weak diversification

The 3 months correlation between Sachem and Black is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Black Hawk Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hawk Acquisition and Sachem Capital 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 Sachem Capital Corp are associated (or correlated) with Black Hawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hawk Acquisition has no effect on the direction of Sachem Capital i.e., Sachem Capital and Black Hawk go up and down completely randomly.

Pair Corralation between Sachem Capital and Black Hawk

Given the investment horizon of 90 days Sachem Capital Corp is expected to generate 3.21 times more return on investment than Black Hawk. However, Sachem Capital is 3.21 times more volatile than Black Hawk Acquisition. It trades about 0.11 of its potential returns per unit of risk. Black Hawk Acquisition is currently generating about 0.05 per unit of risk. If you would invest  93.00  in Sachem Capital Corp on May 7, 2025 and sell it today you would earn a total of  23.00  from holding Sachem Capital Corp or generate 24.73% return on investment over 90 days.

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

Sachem Capital Corp  vs.  Black Hawk Acquisition

Sachem Capital Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sachem Capital Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, Sachem Capital demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Black Hawk Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Black Hawk Acquisition are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Black Hawk is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sachem Capital and Black Hawk

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

The idea behind Sachem Capital Corp and Black Hawk Acquisition 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.