Correlation Between Bridger Aerospace and MicroCloud Hologram

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

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

Diversification Opportunities for Bridger Aerospace and MicroCloud Hologram

-0.72

Correlation Coefficient

Bridger Aerospace  MicroCloud Hologram

Pay attention - limited upside

The 3 months correlation between Bridger and MicroCloud is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and MicroCloud Hologram in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroCloud Hologram and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with MicroCloud Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroCloud Hologram has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and MicroCloud Hologram go up and down completely randomly.

Pair Corralation between Bridger Aerospace and MicroCloud Hologram

Assuming the 90 days horizon Bridger Aerospace Group is expected to generate 13.26 times more return on investment than MicroCloud Hologram. However, Bridger Aerospace is 13.26 times more volatile than MicroCloud Hologram. It trades about 0.15 of its potential returns per unit of risk. MicroCloud Hologram is currently generating about -0.15 per unit of risk. If you would invest  13.00  in Bridger Aerospace Group on September 5, 2024 and sell it today you would lose (3.00) from holding Bridger Aerospace Group or give up 23.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.2%
Values	Daily Returns

Bridger Aerospace Group  vs.  MicroCloud Hologram

Bridger Aerospace

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Bridger Aerospace showed solid returns over the last few months and may actually be approaching a breakup point.

MicroCloud Hologram

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MicroCloud Hologram has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Bridger Aerospace and MicroCloud Hologram

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

The idea behind Bridger Aerospace Group and MicroCloud Hologram 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.