Correlation Between Bayview Acquisition and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and Sterling Capital 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 Bayview Acquisition and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayview Acquisition Corp and Sterling Capital Short, you can compare the effects of market volatilities on Bayview Acquisition and Sterling Capital 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 Bayview Acquisition with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Sterling Capital.
Diversification Opportunities for Bayview Acquisition and Sterling Capital
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bayview and STERLING is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Bayview Acquisition 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 Bayview Acquisition Corp are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Short has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Sterling Capital go up and down completely randomly.
Pair Corralation between Bayview Acquisition and Sterling Capital
Assuming the 90 days horizon Bayview Acquisition Corp is expected to under-perform the Sterling Capital. In addition to that, Bayview Acquisition is 1.56 times more volatile than Sterling Capital Short. It trades about -0.12 of its total potential returns per unit of risk. Sterling Capital Short is currently generating about -0.05 per unit of volatility. If you would invest 838.00 in Sterling Capital Short on September 3, 2024 and sell it today you would lose (2.00) from holding Sterling Capital Short or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. Sterling Capital Short
Performance |
| Timeline |
| Bayview Acquisition Corp |
| Sterling Capital Short |
Bayview Acquisition and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and Sterling Capital
The main advantage of trading using opposite Bayview Acquisition and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Bayview Acquisition vs. Nasdaq Inc | Bayview Acquisition vs. Broadstone Net Lease | Bayview Acquisition vs. Kite Realty Group | Bayview Acquisition vs. Playtika Holding Corp |
| Sterling Capital vs. SPACE | Sterling Capital vs. Bayview Acquisition Corp | Sterling Capital vs. Ampleforth | Sterling Capital vs. ionet |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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