Correlation Between Embecta Corp and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both Embecta Corp 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 Embecta Corp and Bayview Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embecta Corp and Bayview Acquisition Corp, you can compare the effects of market volatilities on Embecta Corp 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 Embecta Corp with a short position of Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embecta Corp and Bayview Acquisition.
Diversification Opportunities for Embecta Corp and Bayview Acquisition
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embecta and Bayview is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp 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 Embecta Corp 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 Embecta Corp 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 Embecta Corp i.e., Embecta Corp and Bayview Acquisition go up and down completely randomly.
Pair Corralation between Embecta Corp and Bayview Acquisition
Given the investment horizon of 90 days Embecta Corp is expected to generate 1.07 times more return on investment than Bayview Acquisition. However, Embecta Corp is 1.07 times more volatile than Bayview Acquisition Corp. It trades about 0.27 of its potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.13 per unit of risk. If you would invest 1,454 in Embecta Corp on September 3, 2024 and sell it today you would earn a total of 629.00 from holding Embecta Corp or generate 43.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
Embecta Corp vs. Bayview Acquisition Corp
Performance |
| Timeline |
| Embecta Corp |
| Bayview Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Embecta Corp and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embecta Corp and Bayview Acquisition
The main advantage of trading using opposite Embecta Corp and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embecta Corp 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.| Embecta Corp vs. Baxter International | Embecta Corp vs. West Pharmaceutical Services | Embecta Corp vs. ResMed Inc | Embecta Corp vs. The Cooper Companies, |
| Bayview Acquisition vs. Distoken Acquisition | Bayview Acquisition vs. Voyager Acquisition Corp | Bayview Acquisition vs. dMY Squared Technology | Bayview Acquisition vs. YHN Acquisition I |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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