Correlation Between Bayview Acquisition and Bleuacacia

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

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

Diversification Opportunities for Bayview Acquisition and Bleuacacia

-0.31

Correlation Coefficient

Bayview Acquisition  Bleuacacia

Very good diversification

The 3 months correlation between Bayview and Bleuacacia is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and bleuacacia ltd Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bleuacacia ltd Warrants and Bayview 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 Bayview Acquisition Corp are associated (or correlated) with Bleuacacia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bleuacacia ltd Warrants has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Bleuacacia go up and down completely randomly.

Pair Corralation between Bayview Acquisition and Bleuacacia

Assuming the 90 days horizon Bayview Acquisition Corp is expected to under-perform the Bleuacacia. But the stock apears to be less risky and, when comparing its historical volatility, Bayview Acquisition Corp is 15.53 times less risky than Bleuacacia. The stock trades about -0.1 of its potential returns per unit of risk. The bleuacacia ltd Warrants is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1.80  in bleuacacia ltd Warrants on September 14, 2024 and sell it today you would lose (0.83) from holding bleuacacia ltd Warrants or give up 46.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Bayview Acquisition Corp  vs.  bleuacacia ltd Warrants

Bayview Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bayview Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

bleuacacia ltd Warrants

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days bleuacacia ltd Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Bleuacacia showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bayview Acquisition and Bleuacacia

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

The idea behind Bayview Acquisition Corp and bleuacacia ltd Warrants 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.