Correlation Between Applied Blockchain and BigBearai Holdings
Can any of the company-specific risk be diversified away by investing in both Applied Blockchain and BigBearai Holdings 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 Applied Blockchain and BigBearai Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Blockchain and BigBearai Holdings, you can compare the effects of market volatilities on Applied Blockchain and BigBearai Holdings 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 Applied Blockchain with a short position of BigBearai Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Blockchain and BigBearai Holdings.
Diversification Opportunities for Applied Blockchain and BigBearai Holdings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Applied and BigBearai is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and BigBearai Holdings go up and down completely randomly.
Pair Corralation between Applied Blockchain and BigBearai Holdings
Given the investment horizon of 90 days Applied Blockchain is expected to generate 2.71 times less return on investment than BigBearai Holdings. But when comparing it to its historical volatility, Applied Blockchain is 1.53 times less risky than BigBearai Holdings. It trades about 0.16 of its potential returns per unit of risk. BigBearai Holdings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 182.00 in BigBearai Holdings on September 13, 2024 and sell it today you would earn a total of 116.00 from holding BigBearai Holdings or generate 63.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Applied Blockchain vs. BigBearai Holdings
Performance |
| Timeline |
| Applied Blockchain |
| BigBearai Holdings |
Applied Blockchain and BigBearai Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Blockchain and BigBearai Holdings
The main advantage of trading using opposite Applied Blockchain and BigBearai Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain position performs unexpectedly, BigBearai Holdings 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 BigBearai Holdings will offset losses from the drop in BigBearai Holdings' long position.| Applied Blockchain vs. Magic Empire Global | Applied Blockchain vs. Zhong Yang Financial | Applied Blockchain vs. Netcapital | Applied Blockchain vs. Lazard |
| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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