Correlation Between Better World and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Better World and Bridgetown Holdings 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 Better World and Bridgetown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better World Acquisition and Bridgetown Holdings, you can compare the effects of market volatilities on Better World and Bridgetown Holdings 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 Better World with a short position of Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better World and Bridgetown Holdings.
Diversification Opportunities for Better World and Bridgetown Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Better and Bridgetown is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Better World Acquisition and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings and Better World 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 Better World Acquisition are associated (or correlated) with Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Better World i.e., Better World and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Better World and Bridgetown Holdings
Assuming the 90 days horizon Better World Acquisition is expected to under-perform the Bridgetown Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Better World Acquisition is 12.99 times less risky than Bridgetown Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Bridgetown Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Bridgetown Holdings on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Bridgetown Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Better World Acquisition vs. Bridgetown Holdings
Performance |
| Timeline |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Better World and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better World and Bridgetown Holdings
The main advantage of trading using opposite Better World and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better World position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.| Better World vs. Khiron Life Sciences | Better World vs. Energy and Environmental | Better World vs. The Andersons | Better World vs. Gfl Environmental Holdings |
| Bridgetown Holdings vs. Energold Drilling Corp | Bridgetown Holdings vs. Precision Drilling | Bridgetown Holdings vs. Verra Mobility Corp | Bridgetown Holdings vs. Drilling Tools International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |