Correlation Between Bayview Acquisition and SPACE
Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and SPACE 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 SPACE 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 SPACE, you can compare the effects of market volatilities on Bayview Acquisition and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and SPACE.
Diversification Opportunities for Bayview Acquisition and SPACE
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bayview and SPACE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and SPACE go up and down completely randomly.
Pair Corralation between Bayview Acquisition and SPACE
Assuming the 90 days horizon Bayview Acquisition Corp is expected to under-perform the SPACE. But the stock apears to be less risky and, when comparing its historical volatility, Bayview Acquisition Corp is 18.78 times less risky than SPACE. The stock trades about -0.18 of its potential returns per unit of risk. The SPACE is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 36.00 in SPACE on September 3, 2024 and sell it today you would earn a total of 23.00 from holding SPACE or generate 63.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bayview Acquisition Corp vs. SPACE
Performance |
| Timeline |
| Bayview Acquisition Corp |
| SPACE |
Bayview Acquisition and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayview Acquisition and SPACE
The main advantage of trading using opposite Bayview Acquisition and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE'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 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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