Correlation Between BigBearai Holdings and Nasdaq CTA

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Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Nasdaq CTA 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 BigBearai Holdings and Nasdaq CTA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BigBearai Holdings and Nasdaq CTA Artificial, you can compare the effects of market volatilities on BigBearai Holdings and Nasdaq CTA 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 BigBearai Holdings with a short position of Nasdaq CTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Nasdaq CTA.

Diversification Opportunities for BigBearai Holdings and Nasdaq CTA

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between BigBearai and Nasdaq is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Nasdaq CTA Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq CTA Artificial and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Nasdaq CTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq CTA Artificial has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Nasdaq CTA go up and down completely randomly.
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Pair Corralation between BigBearai Holdings and Nasdaq CTA

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 11.55 times more return on investment than Nasdaq CTA. However, BigBearai Holdings is 11.55 times more volatile than Nasdaq CTA Artificial. It trades about 0.33 of its potential returns per unit of risk. Nasdaq CTA Artificial is currently generating about 0.25 per unit of risk. If you would invest  176.00  in BigBearai Holdings on September 19, 2024 and sell it today you would earn a total of  164.00  from holding BigBearai Holdings or generate 93.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy91.3%
ValuesDaily Returns

BigBearai Holdings  vs.  Nasdaq CTA Artificial

 Performance 
       Timeline  

BigBearai Holdings and Nasdaq CTA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BigBearai Holdings and Nasdaq CTA

The main advantage of trading using opposite BigBearai Holdings and Nasdaq CTA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Nasdaq CTA 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 Nasdaq CTA will offset losses from the drop in Nasdaq CTA's long position.
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The idea behind BigBearai Holdings and Nasdaq CTA Artificial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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