Correlation Between BioPlus Acquisition and CF Acquisition
Can any of the company-specific risk be diversified away by investing in both BioPlus Acquisition and CF Acquisition 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 BioPlus Acquisition and CF Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioPlus Acquisition Corp and CF Acquisition Corp, you can compare the effects of market volatilities on BioPlus Acquisition and CF Acquisition 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 BioPlus Acquisition with a short position of CF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPlus Acquisition and CF Acquisition.
Diversification Opportunities for BioPlus Acquisition and CF Acquisition
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BioPlus and CFFE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BioPlus Acquisition Corp and CF Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CF Acquisition Corp and BioPlus 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 BioPlus Acquisition Corp are associated (or correlated) with CF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CF Acquisition Corp has no effect on the direction of BioPlus Acquisition i.e., BioPlus Acquisition and CF Acquisition go up and down completely randomly.
Pair Corralation between BioPlus Acquisition and CF Acquisition
If you would invest 1,080 in CF Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding CF Acquisition Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioPlus Acquisition Corp vs. CF Acquisition Corp
Performance |
| Timeline |
| BioPlus Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BioPlus Acquisition and CF Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPlus Acquisition and CF Acquisition
The main advantage of trading using opposite BioPlus Acquisition and CF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPlus Acquisition position performs unexpectedly, CF Acquisition 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 CF Acquisition will offset losses from the drop in CF Acquisition's long position.The idea behind BioPlus Acquisition Corp and CF Acquisition Corp 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.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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