Correlation Between Bridger Aerospace and Papaya Growth

Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and Papaya Growth 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 Papaya Growth 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 Papaya Growth Opportunity, you can compare the effects of market volatilities on Bridger Aerospace and Papaya Growth 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 Papaya Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and Papaya Growth.

Diversification Opportunities for Bridger Aerospace and Papaya Growth

0.0

Correlation Coefficient

Bridger Aerospace  Papaya Growth

Pay attention - limited upside

The 3 months correlation between Bridger and Papaya is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and Papaya Growth Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Papaya Growth Opportunity 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 Papaya Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Papaya Growth Opportunity has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and Papaya Growth go up and down completely randomly.

Pair Corralation between Bridger Aerospace and Papaya Growth

Assuming the 90 days horizon Bridger Aerospace Group is expected to generate 42.02 times more return on investment than Papaya Growth. However, Bridger Aerospace is 42.02 times more volatile than Papaya Growth Opportunity. It trades about 0.1 of its potential returns per unit of risk. Papaya Growth Opportunity is currently generating about 0.05 per unit of risk. If you would invest  6.50  in Bridger Aerospace Group on September 13, 2024 and sell it today you would earn a total of  1.00  from holding Bridger Aerospace Group or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

Bridger Aerospace Group  vs.  Papaya Growth Opportunity

Bridger Aerospace

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bridger Aerospace Group are ranked lower than 7 (%) 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.

Papaya Growth Opportunity

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Papaya Growth Opportunity are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Papaya Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Bridger Aerospace and Papaya Growth

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

The idea behind Bridger Aerospace Group and Papaya Growth Opportunity 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.