Correlation Between TKB Critical and BioPlus Acquisition
Can any of the company-specific risk be diversified away by investing in both TKB Critical and BioPlus 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 TKB Critical and BioPlus Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TKB Critical Technologies and BioPlus Acquisition Corp, you can compare the effects of market volatilities on TKB Critical and BioPlus 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 TKB Critical with a short position of BioPlus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKB Critical and BioPlus Acquisition.
Diversification Opportunities for TKB Critical and BioPlus Acquisition
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TKB and BioPlus is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding TKB Critical Technologies and BioPlus Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioPlus Acquisition Corp and TKB Critical 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 TKB Critical Technologies are associated (or correlated) with BioPlus Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioPlus Acquisition Corp has no effect on the direction of TKB Critical i.e., TKB Critical and BioPlus Acquisition go up and down completely randomly.
Pair Corralation between TKB Critical and BioPlus Acquisition
Assuming the 90 days horizon TKB Critical Technologies is expected to generate 81.11 times more return on investment than BioPlus Acquisition. However, TKB Critical is 81.11 times more volatile than BioPlus Acquisition Corp. It trades about 0.04 of its potential returns per unit of risk. BioPlus Acquisition Corp is currently generating about 0.19 per unit of risk. If you would invest 1,030 in TKB Critical Technologies on August 28, 2024 and sell it today you would earn a total of 61.00 from holding TKB Critical Technologies or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.71% |
| Values | Daily Returns |
TKB Critical Technologies vs. BioPlus Acquisition Corp
Performance |
| Timeline |
| TKB Critical Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BioPlus Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TKB Critical and BioPlus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TKB Critical and BioPlus Acquisition
The main advantage of trading using opposite TKB Critical and BioPlus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKB Critical position performs unexpectedly, BioPlus 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 BioPlus Acquisition will offset losses from the drop in BioPlus Acquisition's long position.| TKB Critical vs. American Axle Manufacturing | TKB Critical vs. Cars Inc | TKB Critical vs. Viemed Healthcare | TKB Critical vs. Magna International |
| BioPlus Acquisition vs. DP Cap Acquisition | BioPlus Acquisition vs. Oak Woods Acquisition | BioPlus Acquisition vs. Insight Acquisition Corp | BioPlus Acquisition vs. ClimateRock Class A |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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