Correlation Between Santa Cruz and Third Point

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

By analyzing existing cross correlation between Santa Cruz County and Third Point Investors, you can compare the effects of market volatilities on Santa Cruz and Third Point 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 Santa Cruz with a short position of Third Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santa Cruz and Third Point.

Diversification Opportunities for Santa Cruz and Third Point

0.0

Correlation Coefficient

Santa Cruz  Third Point

Pay attention - limited upside

The 3 months correlation between Santa and Third is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santa Cruz County and Third Point Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Point Investors and Santa Cruz 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 Santa Cruz County are associated (or correlated) with Third Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Point Investors has no effect on the direction of Santa Cruz i.e., Santa Cruz and Third Point go up and down completely randomly.

Pair Corralation between Santa Cruz and Third Point

If you would invest  4,000  in Santa Cruz County on July 27, 2025 and sell it today you would earn a total of  0.00  from holding Santa Cruz County or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.56%
Values	Daily Returns

Santa Cruz County  vs.  Third Point Investors

Santa Cruz County

Risk-Adjusted Performance

Weakest

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

Third Point Investors

Risk-Adjusted Performance

Weakest

Over the last 90 days Third Point Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Santa Cruz and Third Point

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

The idea behind Santa Cruz County and Third Point Investors 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.