Correlation Between Belong Acquisition and Blue Whale
Can any of the company-specific risk be diversified away by investing in both Belong Acquisition and Blue Whale 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 Belong Acquisition and Blue Whale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belong Acquisition Corp and Blue Whale Acquisition, you can compare the effects of market volatilities on Belong Acquisition and Blue Whale 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 Belong Acquisition with a short position of Blue Whale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belong Acquisition and Blue Whale.
Diversification Opportunities for Belong Acquisition and Blue Whale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Belong and Blue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Belong Acquisition Corp and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale Acquisition and Belong 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 Belong Acquisition Corp are associated (or correlated) with Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of Belong Acquisition i.e., Belong Acquisition and Blue Whale go up and down completely randomly.
Pair Corralation between Belong Acquisition and Blue Whale
Assuming the 90 days horizon Belong Acquisition Corp is expected to generate 3.84 times more return on investment than Blue Whale. However, Belong Acquisition is 3.84 times more volatile than Blue Whale Acquisition. It trades about 0.12 of its potential returns per unit of risk. Blue Whale Acquisition is currently generating about -0.02 per unit of risk. If you would invest 6.00 in Belong Acquisition Corp on October 25, 2024 and sell it today you would lose (5.94) from holding Belong Acquisition Corp or give up 99.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 89.61% |
| Values | Daily Returns |
Belong Acquisition Corp vs. Blue Whale Acquisition
Performance |
| Timeline |
| Belong Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Blue Whale Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Belong Acquisition and Blue Whale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belong Acquisition and Blue Whale
The main advantage of trading using opposite Belong Acquisition and Blue Whale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belong Acquisition position performs unexpectedly, Blue Whale 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 Blue Whale will offset losses from the drop in Blue Whale's long position.The idea behind Belong Acquisition Corp and Blue Whale 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.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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |