Correlation Between Liberty Defense and Bridger Aerospace
Can any of the company-specific risk be diversified away by investing in both Liberty Defense and Bridger Aerospace 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 Liberty Defense and Bridger Aerospace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Defense Holdings and Bridger Aerospace Group, you can compare the effects of market volatilities on Liberty Defense and Bridger Aerospace 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 Liberty Defense with a short position of Bridger Aerospace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Defense and Bridger Aerospace.
Diversification Opportunities for Liberty Defense and Bridger Aerospace
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liberty and Bridger is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Defense Holdings and Bridger Aerospace Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridger Aerospace and Liberty Defense 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 Liberty Defense Holdings are associated (or correlated) with Bridger Aerospace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridger Aerospace has no effect on the direction of Liberty Defense i.e., Liberty Defense and Bridger Aerospace go up and down completely randomly.
Pair Corralation between Liberty Defense and Bridger Aerospace
Assuming the 90 days horizon Liberty Defense Holdings is expected to generate 1.07 times more return on investment than Bridger Aerospace. However, Liberty Defense is 1.07 times more volatile than Bridger Aerospace Group. It trades about 0.23 of its potential returns per unit of risk. Bridger Aerospace Group is currently generating about -0.16 per unit of risk. If you would invest 38.00 in Liberty Defense Holdings on September 25, 2024 and sell it today you would earn a total of 22.00 from holding Liberty Defense Holdings or generate 57.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Liberty Defense Holdings vs. Bridger Aerospace Group
Performance |
| Timeline |
| Liberty Defense Holdings |
| Bridger Aerospace |
Liberty Defense and Bridger Aerospace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Defense and Bridger Aerospace
The main advantage of trading using opposite Liberty Defense and Bridger Aerospace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Defense position performs unexpectedly, Bridger Aerospace 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 Bridger Aerospace will offset losses from the drop in Bridger Aerospace's long position.| Liberty Defense vs. Bridger Aerospace Group | Liberty Defense vs. Ameriguard Security Services | Liberty Defense vs. Global Digital Soltn | Liberty Defense vs. BIO Key International |
| Bridger Aerospace vs. Rigetti Computing | Bridger Aerospace vs. Quantum Computing | Bridger Aerospace vs. IONQ Inc | Bridger Aerospace vs. Quantum |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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