Correlation Between Bayview Acquisition and Armada Hflr

Can any of the company-specific risk be diversified away by investing in both Bayview Acquisition and Armada Hflr 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 Armada Hflr 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 Armada Hflr Pr, you can compare the effects of market volatilities on Bayview Acquisition and Armada Hflr 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 Armada Hflr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayview Acquisition and Armada Hflr.

Diversification Opportunities for Bayview Acquisition and Armada Hflr

-0.24

Correlation Coefficient

Bayview Acquisition  Armada Hflr

Very good diversification

The 3 months correlation between Bayview and Armada is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr 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 Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Armada Hflr go up and down completely randomly.

Pair Corralation between Bayview Acquisition and Armada Hflr

Assuming the 90 days horizon Bayview Acquisition Corp is expected to generate 0.62 times more return on investment than Armada Hflr. However, Bayview Acquisition Corp is 1.6 times less risky than Armada Hflr. It trades about 0.04 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about 0.0 per unit of risk. If you would invest  1,000.00  in Bayview Acquisition Corp on October 4, 2024 and sell it today you would earn a total of  91.00  from holding Bayview Acquisition Corp or generate 9.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	53.43%
Values	Daily Returns

Bayview Acquisition Corp  vs.  Armada Hflr Pr

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. In spite of comparatively stable basic indicators, Bayview Acquisition is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bayview Acquisition and Armada Hflr

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

The idea behind Bayview Acquisition Corp and Armada Hflr Pr 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.