Correlation Between DMY Squared and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both DMY Squared and Bayview 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 DMY Squared and Bayview Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between dMY Squared Technology and Bayview Acquisition Corp, you can compare the effects of market volatilities on DMY Squared and Bayview 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 DMY Squared with a short position of Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMY Squared and Bayview Acquisition.
Diversification Opportunities for DMY Squared and Bayview Acquisition
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DMY and Bayview is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding dMY Squared Technology and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp and DMY Squared 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 dMY Squared Technology are associated (or correlated) with Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of DMY Squared i.e., DMY Squared and Bayview Acquisition go up and down completely randomly.
Pair Corralation between DMY Squared and Bayview Acquisition
Given the investment horizon of 90 days DMY Squared is expected to generate 1.76 times less return on investment than Bayview Acquisition. In addition to that, DMY Squared is 1.97 times more volatile than Bayview Acquisition Corp. It trades about 0.04 of its total potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.14 per unit of volatility. If you would invest 1,001 in Bayview Acquisition Corp on August 29, 2024 and sell it today you would earn a total of 61.00 from holding Bayview Acquisition Corp or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.37% |
| Values | Daily Returns |
dMY Squared Technology vs. Bayview Acquisition Corp
Performance |
| Timeline |
| dMY Squared Technology |
| Bayview Acquisition Corp |
DMY Squared and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DMY Squared and Bayview Acquisition
The main advantage of trading using opposite DMY Squared and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DMY Squared position performs unexpectedly, Bayview 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.| DMY Squared vs. Patria Latin American | DMY Squared vs. ABIVAX Socit Anonyme | DMY Squared vs. Pinnacle Sherman Multi Strategy | DMY Squared vs. Morningstar Unconstrained Allocation |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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