Correlation Between BioPlus Acquisition and Digital Health
Can any of the company-specific risk be diversified away by investing in both BioPlus Acquisition and Digital Health 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 Digital Health 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 Digital Health Acquisition, you can compare the effects of market volatilities on BioPlus Acquisition and Digital Health 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 Digital Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioPlus Acquisition and Digital Health.
Diversification Opportunities for BioPlus Acquisition and Digital Health
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BioPlus and Digital is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding BioPlus Acquisition Corp and Digital Health Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Health Acqui 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 Digital Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Health Acqui has no effect on the direction of BioPlus Acquisition i.e., BioPlus Acquisition and Digital Health go up and down completely randomly.
Pair Corralation between BioPlus Acquisition and Digital Health
Assuming the 90 days horizon BioPlus Acquisition Corp is expected to generate 8.49 times more return on investment than Digital Health. However, BioPlus Acquisition is 8.49 times more volatile than Digital Health Acquisition. It trades about 0.14 of its potential returns per unit of risk. Digital Health Acquisition is currently generating about 0.03 per unit of risk. If you would invest 3.47 in BioPlus Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 10.53 from holding BioPlus Acquisition Corp or generate 303.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 24.62% |
| Values | Daily Returns |
BioPlus Acquisition Corp vs. Digital Health Acquisition
Performance |
| Timeline |
| BioPlus Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Digital Health Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BioPlus Acquisition and Digital Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioPlus Acquisition and Digital Health
The main advantage of trading using opposite BioPlus Acquisition and Digital Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioPlus Acquisition position performs unexpectedly, Digital Health 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 Digital Health will offset losses from the drop in Digital Health's long position.The idea behind BioPlus Acquisition Corp and Digital Health Acquisition 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.| Digital Health vs. Insight Acquisition Corp | Digital Health vs. AlphaVest Acquisition Corp | Digital Health vs. Oak Woods Acquisition | Digital Health vs. Insight Acquisition 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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