Correlation Between ABL and BounceBit

Can any of the company-specific risk be diversified away by investing in both ABL and BounceBit 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 ABL and BounceBit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ABL and BounceBit, you can compare the effects of market volatilities on ABL and BounceBit 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 ABL with a short position of BounceBit. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABL and BounceBit.

Diversification Opportunities for ABL and BounceBit

-0.17

Correlation Coefficient

ABL  BounceBit

Good diversification

The 3 months correlation between ABL and BounceBit is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ABL and BounceBit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BounceBit and ABL 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 ABL are associated (or correlated) with BounceBit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BounceBit has no effect on the direction of ABL i.e., ABL and BounceBit go up and down completely randomly.

Pair Corralation between ABL and BounceBit

If you would invest  28.00  in BounceBit on September 1, 2024 and sell it today you would earn a total of  12.00  from holding BounceBit or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

ABL  vs.  BounceBit

ABL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ABL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, ABL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BounceBit

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BounceBit are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, BounceBit exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ABL and BounceBit

The main advantage of trading using opposite ABL and BounceBit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABL position performs unexpectedly, BounceBit 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 BounceBit will offset losses from the drop in BounceBit's long position.

The idea behind ABL and BounceBit 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.