Correlation Between Bridger Aerospace and Liberty Defense
Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and Liberty Defense 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 Bridger Aerospace and Liberty Defense into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridger Aerospace Group and Liberty Defense Holdings, you can compare the effects of market volatilities on Bridger Aerospace and Liberty Defense 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 Bridger Aerospace with a short position of Liberty Defense. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and Liberty Defense.
Diversification Opportunities for Bridger Aerospace and Liberty Defense
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridger and Liberty is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Liberty Defense Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Defense Holdings and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with Liberty Defense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Defense Holdings has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Liberty Defense go up and down completely randomly.
Pair Corralation between Bridger Aerospace and Liberty Defense
Assuming the 90 days horizon Bridger Aerospace Group is expected to under-perform the Liberty Defense. But the stock apears to be less risky and, when comparing its historical volatility, Bridger Aerospace Group is 1.04 times less risky than Liberty Defense. The stock trades about -0.15 of its potential returns per unit of risk. The Liberty Defense Holdings is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Liberty Defense Holdings on September 24, 2024 and sell it today you would earn a total of 22.00 from holding Liberty Defense Holdings or generate 57.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridger Aerospace Group vs. Liberty Defense Holdings
Performance |
| Timeline |
| Bridger Aerospace |
| Liberty Defense Holdings |
Bridger Aerospace and Liberty Defense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridger Aerospace and Liberty Defense
The main advantage of trading using opposite Bridger Aerospace and Liberty Defense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridger Aerospace position performs unexpectedly, Liberty Defense 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 Liberty Defense will offset losses from the drop in Liberty Defense's long position.| Bridger Aerospace vs. Rigetti Computing | Bridger Aerospace vs. Quantum Computing | Bridger Aerospace vs. IONQ Inc | Bridger Aerospace vs. Quantum |
| Liberty Defense vs. Bridger Aerospace Group | Liberty Defense vs. Ameriguard Security Services | Liberty Defense vs. Global Digital Soltn | Liberty Defense vs. ATWEC Technologies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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