Correlation Between Bridgetown Holdings and CONX Corp
Can any of the company-specific risk be diversified away by investing in both Bridgetown Holdings and CONX 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 Bridgetown Holdings and CONX Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgetown Holdings and CONX Corp, you can compare the effects of market volatilities on Bridgetown Holdings and CONX 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 Bridgetown Holdings with a short position of CONX Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgetown Holdings and CONX Corp.
Diversification Opportunities for Bridgetown Holdings and CONX Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bridgetown and CONX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bridgetown Holdings and CONX Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONX Corp and Bridgetown 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 Bridgetown Holdings are associated (or correlated) with CONX Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONX Corp has no effect on the direction of Bridgetown Holdings i.e., Bridgetown Holdings and CONX Corp go up and down completely randomly.
Pair Corralation between Bridgetown Holdings and CONX Corp
Given the investment horizon of 90 days Bridgetown Holdings is expected to generate 1.04 times less return on investment than CONX Corp. But when comparing it to its historical volatility, Bridgetown Holdings is 1.84 times less risky than CONX Corp. It trades about 0.21 of its potential returns per unit of risk. CONX Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,012 in CONX Corp on October 25, 2024 and sell it today you would earn a total of 31.00 from holding CONX Corp or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
Bridgetown Holdings vs. CONX Corp
Performance |
| Timeline |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CONX Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bridgetown Holdings and CONX Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgetown Holdings and CONX Corp
The main advantage of trading using opposite Bridgetown Holdings and CONX Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgetown Holdings position performs unexpectedly, CONX 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 CONX Corp will offset losses from the drop in CONX Corp's long position.The idea behind Bridgetown Holdings and CONX 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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