Correlation Between Inflection Point and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Inflection Point and BBB Foods 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 Inflection Point and BBB Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and BBB Foods, you can compare the effects of market volatilities on Inflection Point and BBB Foods 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 Inflection Point with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and BBB Foods.
Diversification Opportunities for Inflection Point and BBB Foods
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Inflection and BBB is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Inflection Point i.e., Inflection Point and BBB Foods go up and down completely randomly.
Pair Corralation between Inflection Point and BBB Foods
Assuming the 90 days horizon Inflection Point Acquisition is expected to generate 0.09 times more return on investment than BBB Foods. However, Inflection Point Acquisition is 11.73 times less risky than BBB Foods. It trades about 0.22 of its potential returns per unit of risk. BBB Foods is currently generating about -0.16 per unit of risk. If you would invest 1,086 in Inflection Point Acquisition on September 2, 2024 and sell it today you would earn a total of 14.00 from holding Inflection Point Acquisition or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. BBB Foods
Performance |
| Timeline |
| Inflection Point Acq |
| BBB Foods |
Inflection Point and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and BBB Foods
The main advantage of trading using opposite Inflection Point and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Inflection Point vs. Kinsale Capital Group | Inflection Point vs. GoHealth | Inflection Point vs. Stratasys | Inflection Point vs. NI Holdings |
| BBB Foods vs. Vita Coco | BBB Foods vs. Independence Realty Trust | BBB Foods vs. Inflection Point Acquisition | BBB Foods vs. Anheuser Busch Inbev |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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