Correlation Between StoneBridge Acquisition and BYTE Acquisition

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

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

Diversification Opportunities for StoneBridge Acquisition and BYTE Acquisition

-0.04

Correlation Coefficient

StoneBridge Acquisition  BYTE Acquisition

Good diversification

The 3 months correlation between StoneBridge and BYTE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding StoneBridge Acquisition 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 StoneBridge Acquisition 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 StoneBridge Acquisition 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 StoneBridge Acquisition i.e., StoneBridge Acquisition and BYTE Acquisition go up and down completely randomly.

Pair Corralation between StoneBridge Acquisition and BYTE Acquisition

Assuming the 90 days horizon StoneBridge Acquisition is expected to generate 2.22 times less return on investment than BYTE Acquisition. In addition to that, StoneBridge Acquisition is 1.04 times more volatile than BYTE Acquisition Corp. It trades about 0.08 of its total potential returns per unit of risk. BYTE Acquisition Corp is currently generating about 0.18 per unit of volatility. If you would invest  3.10  in BYTE Acquisition Corp on September 14, 2024 and sell it today you would earn a total of  17.90  from holding BYTE Acquisition Corp or generate 577.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.5%
Values	Daily Returns

StoneBridge Acquisition  vs.  BYTE Acquisition Corp

StoneBridge Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StoneBridge Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, StoneBridge Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BYTE Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BYTE Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, BYTE Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with StoneBridge Acquisition and BYTE Acquisition

The main advantage of trading using opposite StoneBridge Acquisition and BYTE Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StoneBridge Acquisition 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 StoneBridge Acquisition 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.