Correlation Between Better World and Breeze Holdings
Can any of the company-specific risk be diversified away by investing in both Better World and Breeze 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 Breeze 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 Breeze Holdings Acquisition, you can compare the effects of market volatilities on Better World and Breeze 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 Breeze Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better World and Breeze Holdings.
Diversification Opportunities for Better World and Breeze Holdings
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Better and Breeze is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Better World Acquisition and Breeze Holdings Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Breeze Holdings Acqu 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 Breeze Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Breeze Holdings Acqu has no effect on the direction of Better World i.e., Better World and Breeze Holdings go up and down completely randomly.
Pair Corralation between Better World and Breeze Holdings
Assuming the 90 days horizon Better World Acquisition is expected to generate 110.63 times more return on investment than Breeze Holdings. However, Better World is 110.63 times more volatile than Breeze Holdings Acquisition. It trades about 0.11 of its potential returns per unit of risk. Breeze Holdings Acquisition is currently generating about 0.13 per unit of risk. If you would invest 3.05 in Better World Acquisition on August 29, 2024 and sell it today you would lose (2.21) from holding Better World Acquisition or give up 72.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 83.97% |
| Values | Daily Returns |
Better World Acquisition vs. Breeze Holdings Acquisition
Performance |
| Timeline |
| Better World Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Breeze Holdings Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Better World and Breeze Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better World and Breeze Holdings
The main advantage of trading using opposite Better World and Breeze Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better World position performs unexpectedly, Breeze 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 Breeze Holdings will offset losses from the drop in Breeze Holdings' long position.The idea behind Better World Acquisition and Breeze Holdings 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.| Breeze Holdings vs. Qomolangma Acquisition Corp | Breeze Holdings vs. Futuretech II Acquisition | Breeze Holdings vs. Patria Latin American |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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