Correlation Between ESH Acquisition and Binah Capital
Can any of the company-specific risk be diversified away by investing in both ESH Acquisition and Binah Capital 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 ESH Acquisition and Binah Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESH Acquisition Corp and Binah Capital Group,, you can compare the effects of market volatilities on ESH Acquisition and Binah Capital 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 ESH Acquisition with a short position of Binah Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESH Acquisition and Binah Capital.
Diversification Opportunities for ESH Acquisition and Binah Capital
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ESH and Binah is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ESH Acquisition Corp and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, and ESH 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 ESH Acquisition Corp are associated (or correlated) with Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of ESH Acquisition i.e., ESH Acquisition and Binah Capital go up and down completely randomly.
Pair Corralation between ESH Acquisition and Binah Capital
Given the investment horizon of 90 days ESH Acquisition is expected to generate 239.26 times less return on investment than Binah Capital. But when comparing it to its historical volatility, ESH Acquisition Corp is 170.3 times less risky than Binah Capital. It trades about 0.1 of its potential returns per unit of risk. Binah Capital Group, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 200.00 in Binah Capital Group, on September 3, 2024 and sell it today you would earn a total of 58.00 from holding Binah Capital Group, or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESH Acquisition Corp vs. Binah Capital Group,
Performance |
| Timeline |
| ESH Acquisition Corp |
| Binah Capital Group, |
ESH Acquisition and Binah Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESH Acquisition and Binah Capital
The main advantage of trading using opposite ESH Acquisition and Binah Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESH Acquisition position performs unexpectedly, Binah Capital 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 Binah Capital will offset losses from the drop in Binah Capital's long position.| ESH Acquisition vs. Olympic Steel | ESH Acquisition vs. Old Dominion Freight | ESH Acquisition vs. Stepan Company | ESH Acquisition vs. Proficient Auto Logistics, |
| Binah Capital vs. MI Homes | Binah Capital vs. U Haul Holding | Binah Capital vs. Alta Equipment Group | Binah Capital vs. HE Equipment Services |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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