Correlation Between Flex and Bridgetown Holdings
Can any of the company-specific risk be diversified away by investing in both Flex and Bridgetown Holdings 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 Flex and Bridgetown Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and Bridgetown Holdings, you can compare the effects of market volatilities on Flex and Bridgetown Holdings 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 Flex with a short position of Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and Bridgetown Holdings.
Diversification Opportunities for Flex and Bridgetown Holdings
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Flex and Bridgetown is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Flex and Bridgetown Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgetown Holdings and Flex 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 Flex are associated (or correlated) with Bridgetown Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgetown Holdings has no effect on the direction of Flex i.e., Flex and Bridgetown Holdings go up and down completely randomly.
Pair Corralation between Flex and Bridgetown Holdings
Given the investment horizon of 90 days Flex is expected to generate 0.62 times more return on investment than Bridgetown Holdings. However, Flex is 1.62 times less risky than Bridgetown Holdings. It trades about 0.11 of its potential returns per unit of risk. Bridgetown Holdings is currently generating about 0.05 per unit of risk. If you would invest 915.00 in Flex on August 26, 2024 and sell it today you would earn a total of 3,215 from holding Flex or generate 351.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 13.96% |
| Values | Daily Returns |
Flex vs. Bridgetown Holdings
Performance |
| Timeline |
| Flex |
| Bridgetown Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Flex and Bridgetown Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and Bridgetown Holdings
The main advantage of trading using opposite Flex and Bridgetown Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex position performs unexpectedly, Bridgetown Holdings 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 Bridgetown Holdings will offset losses from the drop in Bridgetown Holdings' long position.The idea behind Flex and Bridgetown Holdings 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.| Bridgetown Holdings vs. National Beverage Corp | Bridgetown Holdings vs. Flex | Bridgetown Holdings vs. Compania Cervecerias Unidas | Bridgetown Holdings vs. QuickLogic |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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