Correlation Between Blue Whale and Belong Acquisition
Can any of the company-specific risk be diversified away by investing in both Blue Whale and Belong Acquisition 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 Blue Whale and Belong Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Whale Acquisition and Belong Acquisition Corp, you can compare the effects of market volatilities on Blue Whale and Belong Acquisition 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 Blue Whale with a short position of Belong Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Whale and Belong Acquisition.
Diversification Opportunities for Blue Whale and Belong Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Blue and Belong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Blue Whale Acquisition and Belong Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belong Acquisition Corp and Blue Whale 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 Blue Whale Acquisition are associated (or correlated) with Belong Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belong Acquisition Corp has no effect on the direction of Blue Whale i.e., Blue Whale and Belong Acquisition go up and down completely randomly.
Pair Corralation between Blue Whale and Belong Acquisition
Assuming the 90 days horizon Blue Whale Acquisition is expected to under-perform the Belong Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Blue Whale Acquisition is 3.84 times less risky than Belong Acquisition. The stock trades about -0.02 of its potential returns per unit of risk. The Belong Acquisition Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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 |
Blue Whale Acquisition vs. Belong Acquisition Corp
Performance |
| Timeline |
| Blue Whale Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Belong Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Blue Whale and Belong Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Whale and Belong Acquisition
The main advantage of trading using opposite Blue Whale and Belong Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Whale position performs unexpectedly, Belong Acquisition 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 Belong Acquisition will offset losses from the drop in Belong Acquisition's long position.The idea behind Blue Whale Acquisition and Belong Acquisition 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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