Correlation Between BYTE Acquisition and Blue Whale
Can any of the company-specific risk be diversified away by investing in both BYTE Acquisition and Blue Whale 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 BYTE Acquisition and Blue Whale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BYTE Acquisition Corp and Blue Whale Acquisition, you can compare the effects of market volatilities on BYTE Acquisition and Blue Whale 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 BYTE Acquisition with a short position of Blue Whale. Check out your portfolio center. Please also check ongoing floating volatility patterns of BYTE Acquisition and Blue Whale.
Diversification Opportunities for BYTE Acquisition and Blue Whale
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BYTE and Blue is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BYTE Acquisition Corp and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale Acquisition and BYTE Acquisition 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 BYTE Acquisition Corp are associated (or correlated) with Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of BYTE Acquisition i.e., BYTE Acquisition and Blue Whale go up and down completely randomly.
Pair Corralation between BYTE Acquisition and Blue Whale
Given the investment horizon of 90 days BYTE Acquisition Corp is expected to generate 2.55 times more return on investment than Blue Whale. However, BYTE Acquisition is 2.55 times more volatile than Blue Whale Acquisition. It trades about 0.05 of its potential returns per unit of risk. Blue Whale Acquisition is currently generating about 0.07 per unit of risk. If you would invest 1,005 in BYTE Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 66.00 from holding BYTE Acquisition Corp or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BYTE Acquisition Corp vs. Blue Whale Acquisition
Performance |
| Timeline |
| BYTE Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Blue Whale Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BYTE Acquisition and Blue Whale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BYTE Acquisition and Blue Whale
The main advantage of trading using opposite BYTE Acquisition and Blue Whale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BYTE Acquisition position performs unexpectedly, Blue Whale 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 Blue Whale will offset losses from the drop in Blue Whale's long position.| BYTE Acquisition vs. Patria Latin American | BYTE Acquisition vs. Target Global Acquisition | BYTE Acquisition vs. Healthcare AI Acquisition | BYTE Acquisition vs. Metal Sky Star |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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