Correlation Between Arbor Realty and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both Arbor Realty and Bowen 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 Arbor Realty and Bowen Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Realty Trust and Bowen Acquisition Corp, you can compare the effects of market volatilities on Arbor Realty and Bowen 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 Arbor Realty with a short position of Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Bowen Acquisition.
Diversification Opportunities for Arbor Realty and Bowen Acquisition
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Bowen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp and Arbor Realty 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 Arbor Realty Trust are associated (or correlated) with Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Arbor Realty i.e., Arbor Realty and Bowen Acquisition go up and down completely randomly.
Pair Corralation between Arbor Realty and Bowen Acquisition
Considering the 90-day investment horizon Arbor Realty Trust is expected to generate 13.53 times more return on investment than Bowen Acquisition. However, Arbor Realty is 13.53 times more volatile than Bowen Acquisition Corp. It trades about 0.02 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about 0.14 per unit of risk. If you would invest 1,130 in Arbor Realty Trust on October 12, 2024 and sell it today you would earn a total of 168.00 from holding Arbor Realty Trust or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 71.31% |
| Values | Daily Returns |
Arbor Realty Trust vs. Bowen Acquisition Corp
Performance |
| Timeline |
| Arbor Realty Trust |
| Bowen Acquisition Corp |
Arbor Realty and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Realty and Bowen Acquisition
The main advantage of trading using opposite Arbor Realty and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, Bowen 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 Bowen Acquisition will offset losses from the drop in Bowen Acquisition's long position.| Arbor Realty vs. Starwood Property Trust | Arbor Realty vs. Ready Capital Corp | Arbor Realty vs. Two Harbors Investments | Arbor Realty vs. AGNC Investment Corp |
| Bowen Acquisition vs. Arhaus Inc | Bowen Acquisition vs. ScanSource | Bowen Acquisition vs. Hollywood Intermediate | Bowen Acquisition vs. The Gap, |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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