Correlation Between Metal Sky and BYTE Acquisition
Can any of the company-specific risk be diversified away by investing in both Metal Sky and BYTE 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 Metal Sky and BYTE Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metal Sky Star and BYTE Acquisition Corp, you can compare the effects of market volatilities on Metal Sky and BYTE 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 Metal Sky with a short position of BYTE Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metal Sky and BYTE Acquisition.
Diversification Opportunities for Metal Sky and BYTE Acquisition
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metal and BYTE is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Metal Sky Star and BYTE Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYTE Acquisition Corp and Metal Sky 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 Metal Sky Star are associated (or correlated) with BYTE Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYTE Acquisition Corp has no effect on the direction of Metal Sky i.e., Metal Sky and BYTE Acquisition go up and down completely randomly.
Pair Corralation between Metal Sky and BYTE Acquisition
Given the investment horizon of 90 days Metal Sky is expected to generate 1.43 times less return on investment than BYTE Acquisition. But when comparing it to its historical volatility, Metal Sky Star is 1.7 times less risky than BYTE Acquisition. It trades about 0.06 of its potential returns per unit of risk. BYTE Acquisition Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,005 in BYTE Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 66.00 from holding BYTE Acquisition Corp or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.79% |
| Values | Daily Returns |
Metal Sky Star vs. BYTE Acquisition Corp
Performance |
| Timeline |
| Metal Sky Star |
| BYTE Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Metal Sky and BYTE Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metal Sky and BYTE Acquisition
The main advantage of trading using opposite Metal Sky and BYTE Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metal Sky position performs unexpectedly, BYTE 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 BYTE Acquisition will offset losses from the drop in BYTE Acquisition's long position.The idea behind Metal Sky Star and BYTE Acquisition Corp 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.| BYTE Acquisition vs. Patria Latin American | BYTE Acquisition vs. Target Global Acquisition | BYTE Acquisition vs. Healthcare AI Acquisition | BYTE Acquisition vs. Metal Sky Star |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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