Correlation Between Bayview Acquisition and Beijing Capital
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and Beijing 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 Beijing 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 Beijing Capital International, you can compare the effects of market volatilities on Bayview Acquisition and Beijing 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 Beijing Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Beijing Capital.
Diversification Opportunities for Bayview Acquisition and Beijing Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bayview and Beijing is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Beijing Capital International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Capital Inte 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 Beijing Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Capital Inte has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Beijing Capital go up and down completely randomly.
Pair Corralation between Bayview Acquisition and Beijing Capital
Assuming the 90 days horizon Bayview Acquisition is expected to generate 5.71 times less return on investment than Beijing Capital. But when comparing it to its historical volatility, Bayview Acquisition Corp is 18.71 times less risky than Beijing Capital. It trades about 0.08 of its potential returns per unit of risk. Beijing Capital International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Beijing Capital International on September 4, 2024 and sell it today you would lose (3.00) from holding Beijing Capital International or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.82% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. Beijing Capital International
Performance |
| Timeline |
| Bayview Acquisition Corp |
| Beijing Capital Inte |
Bayview Acquisition and Beijing Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and Beijing Capital
The main advantage of trading using opposite Bayview Acquisition and Beijing Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition position performs unexpectedly, Beijing 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 Beijing Capital will offset losses from the drop in Beijing Capital's long position.| Bayview Acquisition vs. Asure Software | Bayview Acquisition vs. Elmos Semiconductor SE | Bayview Acquisition vs. Cadence Design Systems | Bayview Acquisition vs. Analog Devices |
| Beijing Capital vs. Aena SME SA | Beijing Capital vs. SPACE | Beijing Capital vs. Bayview Acquisition Corp | Beijing Capital vs. T Rowe Price |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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