Correlation Between Main Street and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both Main Street and Bowen 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 Main Street and Bowen Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Bowen Acquisition Corp, you can compare the effects of market volatilities on Main Street and Bowen 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 Main Street with a short position of Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Bowen Acquisition.
Diversification Opportunities for Main Street and Bowen Acquisition
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Main and Bowen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp and Main Street 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 Main Street Capital are associated (or correlated) with Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Main Street i.e., Main Street and Bowen Acquisition go up and down completely randomly.
Pair Corralation between Main Street and Bowen Acquisition
Given the investment horizon of 90 days Main Street Capital is expected to generate 0.38 times more return on investment than Bowen Acquisition. However, Main Street Capital is 2.66 times less risky than Bowen Acquisition. It trades about 0.19 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about -0.03 per unit of risk. If you would invest 3,564 in Main Street Capital on October 28, 2024 and sell it today you would earn a total of 2,553 from holding Main Street Capital or generate 71.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Street Capital vs. Bowen Acquisition Corp
Performance |
| Timeline |
| Main Street Capital |
| Bowen Acquisition Corp |
Main Street and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Bowen Acquisition
The main advantage of trading using opposite Main Street and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Bowen 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 Bowen Acquisition will offset losses from the drop in Bowen Acquisition's long position.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Bowen Acquisition vs. National Vision Holdings | Bowen Acquisition vs. EMCOR Group | Bowen Acquisition vs. Amgen Inc | Bowen Acquisition vs. Teleflex Incorporated |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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