Correlation Between Bayview Acquisition and Embecta Corp
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and Embecta Corp 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 Embecta Corp 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 Embecta Corp, you can compare the effects of market volatilities on Bayview Acquisition and Embecta Corp 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 Embecta Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Embecta Corp.
Diversification Opportunities for Bayview Acquisition and Embecta Corp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bayview and Embecta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Embecta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embecta Corp 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 Embecta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embecta Corp has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Embecta Corp go up and down completely randomly.
Pair Corralation between Bayview Acquisition and Embecta Corp
Assuming the 90 days horizon Bayview Acquisition Corp is expected to under-perform the Embecta Corp. But the stock apears to be less risky and, when comparing its historical volatility, Bayview Acquisition Corp is 30.31 times less risky than Embecta Corp. The stock trades about -0.18 of its potential returns per unit of risk. The Embecta Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,454 in Embecta Corp on September 3, 2024 and sell it today you would earn a total of 629.00 from holding Embecta Corp or generate 43.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. Embecta Corp
Performance |
| Timeline |
| Bayview Acquisition Corp |
| Embecta Corp |
Bayview Acquisition and Embecta Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and Embecta Corp
The main advantage of trading using opposite Bayview Acquisition and Embecta Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition position performs unexpectedly, Embecta Corp 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 Embecta Corp will offset losses from the drop in Embecta Corp'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 |
| Embecta Corp vs. Baxter International | Embecta Corp vs. West Pharmaceutical Services | Embecta Corp vs. ResMed Inc | Embecta Corp vs. The Cooper Companies, |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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