Correlation Between BigBearai Holdings and Xerox Corp
Can any of the company-specific risk be diversified away by investing in both BigBearai Holdings and Xerox 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 BigBearai Holdings and Xerox Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BigBearai Holdings and Xerox Corp, you can compare the effects of market volatilities on BigBearai Holdings and Xerox 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 BigBearai Holdings with a short position of Xerox Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBearai Holdings and Xerox Corp.
Diversification Opportunities for BigBearai Holdings and Xerox Corp
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BigBearai and Xerox is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Xerox Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xerox Corp 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 Xerox Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xerox Corp has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Xerox Corp go up and down completely randomly.
Pair Corralation between BigBearai Holdings and Xerox Corp
Given the investment horizon of 90 days BigBearai Holdings is expected to generate 1.5 times more return on investment than Xerox Corp. However, BigBearai Holdings is 1.5 times more volatile than Xerox Corp. It trades about 0.27 of its potential returns per unit of risk. Xerox Corp is currently generating about -0.1 per unit of risk. If you would invest 173.00 in BigBearai Holdings on August 27, 2024 and sell it today you would earn a total of 72.00 from holding BigBearai Holdings or generate 41.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BigBearai Holdings vs. Xerox Corp
Performance |
| Timeline |
| BigBearai Holdings |
| Xerox Corp |
BigBearai Holdings and Xerox Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BigBearai Holdings and Xerox Corp
The main advantage of trading using opposite BigBearai Holdings and Xerox Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBearai Holdings position performs unexpectedly, Xerox 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 Xerox Corp will offset losses from the drop in Xerox Corp's long position.| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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