Correlation Between Bridgetown Holdings and Whole Earth
Can any of the company-specific risk be diversified away by investing in both Bridgetown Holdings and Whole Earth 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 Whole Earth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgetown Holdings and Whole Earth Brands, you can compare the effects of market volatilities on Bridgetown Holdings and Whole Earth 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 Whole Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgetown Holdings and Whole Earth.
Diversification Opportunities for Bridgetown Holdings and Whole Earth
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bridgetown and Whole is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bridgetown Holdings and Whole Earth Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whole Earth Brands 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 Whole Earth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whole Earth Brands has no effect on the direction of Bridgetown Holdings i.e., Bridgetown Holdings and Whole Earth go up and down completely randomly.
Pair Corralation between Bridgetown Holdings and Whole Earth
Assuming the 90 days horizon Bridgetown Holdings is expected to generate 6.96 times less return on investment than Whole Earth. But when comparing it to its historical volatility, Bridgetown Holdings is 5.75 times less risky than Whole Earth. It trades about 0.06 of its potential returns per unit of risk. Whole Earth Brands is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Whole Earth Brands on August 28, 2024 and sell it today you would lose (26.00) from holding Whole Earth Brands or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.43% |
| Values | Daily Returns |
Bridgetown Holdings vs. Whole Earth Brands
Performance |
| Timeline |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Whole Earth Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bridgetown Holdings and Whole Earth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgetown Holdings and Whole Earth
The main advantage of trading using opposite Bridgetown Holdings and Whole Earth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgetown Holdings position performs unexpectedly, Whole Earth 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 Whole Earth will offset losses from the drop in Whole Earth's long position.| Bridgetown Holdings vs. HE Equipment Services | Bridgetown Holdings vs. Alchemy Investments Acquisition | Bridgetown Holdings vs. SEI Investments | Bridgetown Holdings vs. Western Acquisition Ventures |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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